Americans’ Love For Shrimps Sends This Indian Stock Soaring
Apex Frozen Foods has gained 75% to its issue price of Rs 175 in nine trading sessions.
Indian investors are hungry for a bite of the seafood Americans love: shrimps.
Shares of shrimp exporter Apex Frozen Foods Ltd. hit the 5 percent upper circuit – the maximum it can rise in a day – in each of the nine sessions since its listing on September 4. The stock has gained nearly 90 percent over its issue price of Rs 175 apiece.
India’s seafood exports hit an all-time high in the year ended March, riding on shrimp shipments to the U.S. and Europe, according to Marine Products Exports Development Authority. The size of the export market is expected to more than double to $7 billion by the year to March 2021, Apex Food said in its draft red herring prospectus.
Apex Frozen Foods raised close to Rs 152 crore from its initial public offering, of which it plans to use Rs 90 crore to set up a new processing unit with capacity of 20,000 metric tonnes per annum to meet growing demand.
The new unit will be ready by the end of June 2018 and will work at utilisation levels of 50 percent initially, K Choudary, executive director at Apex Frozen Foods, told BloombergQuint. For the year to March 20, he expects capacity utilisation at 75 percent on the back of growing demand.
“The demand is good as seafood consumption is increasing globally,” Choudary said.
The shrimp exporter can produce 15,240 million tonnes of shrimps a year and eyes a capacity utilisation of 80 percent for the ongoing financial year, Choudary said.
In the year ended March, it earned Rs 699 crore revenue with 12,240 MTPA capacity and 70 percent utilisation. Its current capacity includes a 6,000 MTPA leased facility and it may look at discontinuing or reducing its reliance on the unit depending on demand, Choudary said.