Shrimp exporter Apex Frozen Foods Ltd. will list on the exchanges on Monday after it raised funds in an initial public offering to expand its processing capacity to meet growing demand in the U.S. and Europe.
The company sold shares at Rs 175 apiece to raise Rs 152 crore in the IPO. The offer was subscribed six times. High net worth individuals put in bids for 7.82 times the shares on offer while the retail category was subscribed 8.46 times. The portion reserved for qualified institutional buyers was subscribed 1.91 times.
Of the total proceeds, the company raised Rs 127 crore through a fresh issue. Apex will use most of it to set up a new shrimp processing unit with a proposed capacity of 20,000 million tonnes per annum in Andhra Pradesh.
- Apex Frozen Foods’ net worth stood at close to Rs 97 crore as of March 31, translating into a book value of Rs 31 per share after issuing the new shares.
- At the issue price of Rs 175 apiece, the earnings per share and price-earnings ratio for the year ended March, after issuing new shares, stand at Rs 7.8 and 22.4 times, respectively, according to BloombergQuint’s calculations.
- Its revenue grew at a compounded annual growth rate (CAGR) of 28.6 percent and net profit rose at 27 percent over five years to March.
- Earnings before interest, tax and depreciation and amortisation grew at a CAGR of 19.5 percent, while the EBITDA margins contracted by 220 basis points in the last five years to 6.5 percent.
Apex competes directly with Waterbase Ltd, while Avanti Feeds Ltd. is not a rival as it generates the most of its revenue by selling fish food.
Apex’s revenue and net profit grew at a faster pace in the last five years compared to Waterbase. The frozen food supplier not only has a higher book value per share, but is also available at a cheaper valuation compared to its peer.