In a groundbreaking move that has captured the attention of investors and market enthusiasts alike, HMA Agro Industries, a company specializing in the export of buffalo meat, is set to be listed on the stock market through its initial public offering (IPO). While the financials of the company may not be the primary reason behind the buzz, the real driving force lies in the unique opportunity it presents. The investor community is abuzz with excitement, speculating that HMA Agro Industries may enjoy a monopoly in its niche market. This unprecedented scenario has sparked a wave of curiosity and anticipation, marking a remarkable milestone in the history of the stock market.
While the company holds the potential to achieve a monopoly in its niche market, there is a growing sentiment of opposition from a section of the population, particularly vegetarians, whose ethical beliefs are at odds with the business. As a pure vegetarian myself, I personally feel conflicted about investing in such a company, placing moral values above financial gain. However, it is important to objectively evaluate the company’s operations before making any investment decisions.
HMA Agro Industries, apart from being one of India’s top three exporters, generates approximately 91% of its revenue from buffalo meat exports. Additionally, the company is involved in the business of frozen fish and basmati rice. Understanding the diversified nature of the company’s operations is crucial when considering its investment potential.
For many vegetarians and individuals who prioritize ethical considerations, investing in a company primarily focused on the export of meat products can be a challenging decision. Animal welfare, environmental impact, and personal beliefs play a significant role in shaping these concerns. It is important for each individual to assess their values and make investment choices aligned with their moral compass.
As a vegetarian myself, I understand the conflict between financial gain and personal values, and the importance of objectively evaluating the company’s operations before making investment decisions.
HMA Agro Industries is not only a top exporter but also diversifies its revenue sources through frozen fish and basmati rice. Understanding the company’s varied operations is crucial when assessing its investment potential.
To evaluate the investment potential of HMA Agro Industries, it is essential to examine the company’s financials and consider potential risks. Despite the growing controversy surrounding the meat industry, it is crucial to objectively analyze the company’s performance. In this regard, we will delve into the company’s assets, profit after tax, and debt status from 2019 to 2022, while also exploring certain key risk factors.
HMA Agro Industries’ assets have shown a fluctuating trend in recent years. From 2019 to 2020, assets decreased from 549 crores to 472 crores. However, in 2021, assets increased to 572 crores, and in 2022, they experienced a significant jump to 856 crores. This indicates a continuous growth in the company’s assets over the past few years.
While some individuals may hold personal moral objections to businesses associated with meat products, it is important to recognize that financial success can still be achieved in such industries. The alcohol industry serves as an example, where substantial profits are generated despite certain individuals abstaining from supporting it. Similarly, the meat industry, including buffalo meat exports, has seen considerable financial success. However, individual investors must assess their values and determine if investing aligns with their ethical beliefs.
HMA Agro Industries heavily relies on exports for its major revenue stream. This dependence exposes the company to potential risks associated with changes in export regulations or shifts in global trade dynamics. Any modifications in governmental policies or disease outbreaks affecting livestock can adversely impact the company’s business operations. Additionally, the company’s supply chain relies on third-party sources, which introduces an element of uncertainty in terms of consistent supply and potential quality control issues.
As we dive deeper into HMA Agro Industries’ financials, we’ll find that revenue, profit after tax, and debt play significant roles in assessing the company’s performance. While revenue fluctuates due to its dependency on exports, profit after tax has shown a positive growth trend over the years. Additionally, although the company’s debt has increased steadily, it is outweighed by its growing assets. Considering these financial aspects, it is evident that the company has shown promising results.
HMA Agro Industries’ revenue has displayed a non-linear growth pattern, reflecting its reliance on exports. While revenue decreased from 2019 to 2020 and 2020 to 2021, it experienced a sudden jump in 2022, surpassing 3000 crores. Similarly, the company’s profit after tax has shown a positive trend, with an increase from 31 crores in 2019 to 117 crores in 2022. Despite the continuous increase in debt, the company’s profit generation capabilities and growing assets indicate a favorable financial position.
The IPO of HMA Agro Industries will be open for subscription from June 20 to June 23. The issue size is set at 480 crores, with a breakdown of 330 crores under the offer for sale (which will go to the promoters) and 150 crores as a fresh issue (to be utilized for business expansion). The share price band is set between 555 and 585. It is important to review the actual price band during the application process. The minimum investment amount will be 14625 (calculated by multiplying 585 by 25).
It becomes evident that this listing is a unique opportunity in the share market. Given the absence of similar businesses in the market, there is a potential for the stock to command a favorable Price-to-Earnings (PE) ratio, indicating possible price appreciation. Retail investors can apply for up to 2 lakhs in the retail category, and those who are not allotted shares will receive their refunds by June 30. The shares will be credited to the Demat accounts on June 3, with trading in the stock commencing on June 4.
One of the most compelling aspects of HMA Agro Industries’ IPO is its status as a monopoly business in the share market. The absence of comparable companies in the market often leads to a positive market sentiment, resulting in potentially higher PE ratios and increased share prices. Investors may find this aspect attractive, considering the unique market positioning of the company.
Retail investors have the opportunity to apply for up to 2 lakhs in the IPO. Those who are unsuccessful in securing an allotment will receive their refund by June 30. The shares will be credited to investors’ Demat accounts on June 3, allowing for seamless trading when the stock is listed on June 4. It is important for interested investors to stay updated with market information and trends to make informed decisions.
Now let’s talk about the existing grey market premium. The time I am making this blog, I checked that its grey market premium is running around the world. Means a lot of people are not aggressive for it. What should you do? If you want to see that financials are fine, then one thing you should check is the over subscription status. You don’t apply on the first day at all. Don’t apply on the first day and the second day. You can apply on the first day by checking the over subscription status.