IPO Analysis

Date Heading Details
20-Nov-2019   11:44 Hrs IST CSB Bank coming with an IPO to raise upto Rs 409.93 crore <p align="justify"><strong>CSB Bank</strong> <ul><li><div align="justify">CSB Bank is coming out with a 100% book building; initial public offering (IPO) of 2,10,21,821 shares of Rs 10 each in a price band Rs 193-195 per equity share.&nbsp;&nbsp;&nbsp;</div></li><li><div align="justify">Atleast 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not more than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.</div></li><li><div align="justify">The issue will open for subscription on November 22, 2019 and will close on November 26, 2019.</div></li><li><div align="justify">The shares will be listed on BSE as well as NSE.</div></li><li><div align="justify">The face value of the share is Rs 10 and is priced 19.30 times of its face value on the lower side and 19.50 times on the higher side.</div></li><li><div align="justify">Book running lead manager to the issue are Axis Capital and IIFL Securities. </div></li><li><div align="justify">Compliance Officer for the issue is Sijo Varghese.</div></li></ul><p align="justify"><strong>Profile of the bank</strong> <p align="justify">The Bank was incorporated on November 26, 1920 under the Indian Companies Act, 1913 as ‘The Catholic Syrian Bank Limited'. A fresh certificate of incorporation under the Companies Act, 1956 was issued by the Registrar of Companies, Kerala at Ernakulum (RoC) on April 14, 1987. The Shareholders of Bank approved the change of the name of Bank from ‘The Catholic Syrian Bank Limited' to ‘CSB Bank Limited' through a postal ballot resolution dated May 4, 2019. RBI through its letter dated April 1, 2019 conveyed its ‘no objection' in terms of Section 49B of the Banking Regulation Act to the change of name of Bank from ‘The Catholic Syrian Bank Limited' to ‘CSB Bank Limited'. Subsequently, a fresh certificate of incorporation under the Companies Act, 2013 was issued by the RoC on June 10, 2019 and a fresh license bearing no. MUM-147 dated June 28, 2019 was issued by the RBI under Bank's new name to carry on the banking business in India, in lieu of Bank's previous license dated June 19, 1969. The name of Bank was changed to ‘CSB Bank Limited' from “The Catholic Syrian Bank Limited”, in the second schedule of the RBI Act with effect from June 10, 2019.<p align="justify">The bank is one of the oldest private sector banks in India with a history of over 98 years and has a strong base in Kerala along with significant presence in Tamil Nadu, Karnataka, and Maharashtra. It offers a wide range of products and services to its overall customer base of 1.3 million as on September 30, 2019, with particular focus on SME, Retail, and NRI customers. It delivers its products and services through multiple channels, including 412 branches (excluding three service branches and three asset recovery branches) and 290 ATMs spread across 16 states and four union territories as on September 30, 2019, and various alternate channels such as micro ATMs, debit cards, internet banking, mobile banking, point of sale services and UPI. While the bank has a long operating history as a traditional bank, it is currently focusing on implementation of strategic changes in its business model to function efficiently as a full service new age private sector bank backed by its new marquee investor - FIHM, its Promoter.<p align="justify">Under its SME banking business, the bank caters to financial institutions, agriculture and allied businesses, and vendors and dealers of corporates. It offers a wide range of products including term loans, working capital loans, invoice/bill discounting, letters of credit and bank guarantees. Under its retail banking business, it offers a wide range of loan and deposit products to its retail and NRI customers. Its retail lending products include gold loans, vehicle loans including two wheeler loans, loans against properties, personal loans, housing loans, agricultural loans, and education loans. Under its wholesale banking business, the bank caters to large and mid-size corporates and other business entities (with credit requirement of Rs 250 million and above). Besides, the banks treasury operations primarily consist of statutory reserves management, asset liability management, liquidity management, investment and trading of securities, and money market and foreign exchange activities. Its treasury operations are aimed at maintaining an optimum level of liquidity, while complying with the RBI mandated CRR and SLR.<p align="justify"><strong>Proceed is being used for:</strong><ul><li><div align="justify">Augmenting bank's Tier-I capital base to meet the bank's future capital requirements; and</div></li><li><div align="justify">Achieving the benefits of listing the Equity Shares on the Stock Exchanges and Offer for Sale.</div></li></ul><p align="justify"><strong>Industry Overview</strong><p align="justify">In the recent years, India's banking sector has been facing a large overhang of balance sheet stress. During 2017-18, the persisting deterioration in asset quality necessitated sharp increases in provisions and for the first time since 1993-94, the banking system as a whole, particularly driven by public sector banks (PSBs), registered losses. During 2019-20, the banking sector is poised to build upon the consolidation achieved in the year gone by. Stress tests for credit risk conducted by the Reserve Bank indicate that under the baseline scenario, SCBs' gross NPA ratio may decline further to 9.0 per cent by end-March 2020 (9.1 per cent as at end-March 2019). This would release headroom for provisioning efforts, a turnaround in financial performance and for energising and broadening the flow of credit to the productive sectors of the economy. Concomitantly, several regulatory and supervisory measures are underway to strengthen the soundness of the banking system. Reviving consumption demand and private investment has assumed the highest priority in 2019-20. This may involve strengthening the banking and non-banking sectors, a big push for spending on infrastructure and implementation of much needed structural reforms in the areas of labour laws, taxation, and other legal reforms, which will also enhance ease of doing business in pursuit of fulfilling the vision of India becoming a $ 5 trillion economy by 2024-25.<p align="justify">Retail banking refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side and personal loans like Consumer Durables, Housing (Including Priority Sector Housing), Advances against Fixed, Advances to Individuals against share, bonds, etc., Credit Card Outstanding, Education, Vehicle Loans and Other Personal Loans, etc. on the assets side, are the key products offered by banks in India. Related ancillary services include credit cards, cross sell of third party financial products, depository services. Besides, the commercial banking sector in Indian is quite diverse. Based on the ownership pattern, banks can be broadly categorised into public sector banks, private sector banks and foreign banks. While the State Bank of India, nationalised banks and Regional Rural Banks (RRBs) are constituted under respective enactments of the Parliament, the private sector banks and foreign banks are considered banking companies as defined in the Banking Regulation Act, 1949.<p align="justify"><strong>Pros and strengths</strong><p align="justify"><strong>Strong channel network and trusted brand in South India:</strong> The bank provides its products and services primarily through an extensive physical network of branches and ATMs. It operates in 16 States and four Union Territories in India, reaching 1.3 million customers through 412 branches (excluding three service branches and three asset recovery branches) and 290 ATMs, as on September 30, 2019. In addition to its physical network, it has made investments in development of alternate channels from time to time. It formed a dedicated alternate delivery channels unit in the year 2014 for enhancing its online banking capabilities and digital payment solutions for providing services to its customers via non-branch outlets to improve their banking experience. With over 98 years of history, it has developed a well-recognized and trusted brand in south India, particularly in the states of Kerala and Tamil Nadu, where it has built strong relationships with many of its customers, which has been one of its key growth drivers.<p align="justify"><strong>Strong capital base for growth:</strong> The bank's capital position has been significantly strengthened post FIHMs investment in its Bank. Pursuant to a preferential allotment of Equity Shares and warrants to FIHM, for which it received Rs 7,207.53 million in Fiscal 2019 and the balance amount of Rs 4,869.29 million in Fiscal 2020, it has a strong capital base for growth acceleration, something which it was not able to accomplish in past due to paucity of capital. As per the Basel III Norms, the CRAR, as assessed by Bank as on March 31, 2019 and September 30, 2019, was 16.70% and 22.77% (including capital conservation buffer), respectively. This is above the minimum prescribed CRAR of 10.875% (including capital conservation buffer of 1.875%) stipulated by the RBI in the Basel III Norms. Capital augmentation post infusion of funds by FIHM helped vitalize Bank's growth engine.<p align="justify"><strong>Well established SME business:</strong> SMEs are more often confronted with challenges such as availability of adequate and timely financial resources than large corporates. The bank focuses on meeting the funding and banking requirements of these SME customers. As a percentage of its total advances, loans to SME customers accounted for 43%, 37%, 32% and 29.47% as on March 31, 2017, March 31, 2018, March 31, 2019 and September 30, 2019, respectively. Lending to SMEs enables bank to diversify its credit risk profile due to relatively smaller individual exposures. SME business offers comparatively higher yields, cross-selling and associated business opportunities, and higher degree of secured and collateralized loans. Further, banks SME loans are secured against some tangible security from its SME Borrowers. It has strategically decided to reduce its exposure to certain sectors like commercial real estate, jewellery, steel, cashew, and spinning mills on the basis of its assessment and forecast of difficult business conditions in these sectors. To enhance its sales and marketing efforts, it has established a separate team focusing on SME business with credit analysts, relationship managers, and cluster heads assisting the branches in sourcing additional business and achieving deeper penetration.<p align="justify"><strong>Streamlined risk management controls, policies and procedures:</strong> The bank has instituted prudent risk management controls, policies, and procedures that are critical for the long-term sustainable development of its business. It has implemented risk management procedures for its credit exposures, including credit evaluation, credit scoring, risk based pricing models, and risk monitoring and control mechanisms. It has developed its own credit risk rating framework in terms of which all exposures of Rs 2.5 million and above are brought within a rating mechanism. The rating framework incorporates, inter-alia, financial analysis and sensitivity and industrial and management risks. A separate risk management department formulates and implements credit risk evaluation, approves risk management framework and policies, oversees the credit approval process, and periodically reviews the same so as to ensure that the business conducted is consistent with its risk appetite, with a focus on maintaining and enhancing asset quality. The bank's credit risk policy is periodically reviewed and updated to incorporate changes in the environment, market, and regulatory guidelines.<p align="justify"><strong>Risks and concerns:</strong><p align="justify"><strong>Regional concentration:</strong> The bank's concentration in the southern India, and specifically in Kerala, exposes it to many adverse economic or political circumstances in the region as compared to other public and private sector banks that have a more diversified national presence. Any political unrest, disruption, disturbance, or sustained downturn in the economy of Kerala and other states in southern India could adversely affect its business, financial condition, and results of operations, Additionally, while the bank continue to expand its operations outside of its traditional areas of operation, namely Kerala and other states in southern India, it faces risks with respect to its operations in geographical areas in which the bank do not possess the same level of familiarity with the economic condition, consumer base, and commercial operations. Also, its competitors may have already established operations in areas outside southern India and it may find it difficult to attract customers in such new areas. The bank may not be able to successfully manage the risks associated with such expansion, which could have a material adverse effect on its business, financial condition, and results of operations.<p align="justify"><strong>Operate in highly regulated environment:</strong> The bank operates in a highly regulated environment in which it is regulated by the SEBI, the RBI, the IRDAI, and other regulators. Accordingly, legal and regulatory risks are inherent and substantial in its business. As it operates under licences or registrations obtained from appropriate regulators, it is subject to actions that may be taken by such regulators in the event of any non-compliance with any applicable policies, guidelines, circulars, notifications, and regulations issued by the relevant regulators. The bank is also required to comply with regulatory guidelines in relation to approval and disbursal of loans. Such requirements imposed by regulators are designed to ensure the integrity of the financial markets and to protect investors and depositors. Any non-compliance with regulatory guidelines and directions may result in substantial penalties and reputational impact, which may affect the price of its Equity Shares. Any change to the existing legal or regulatory framework will require bank to allocate additional resources, which may increase its regulatory compliance costs and direct management attention and consequently affect its business.<p align="justify"><strong>Face competition:</strong> The bank faces competition from public and private sector Indian commercial banks and foreign commercial banks in all its products and services. Some such banks are large institutions and may have much larger customer and deposit bases, larger branch networks, and wider capital base. It also faces competition in some of its products and services from NBFCs, small finance banks, post office savings schemes, exchange houses, micro financing institutions, co-operative banks, and other entities operating in the financial sector. Further liberalisation of the Indian financial sector could also lead to a greater presence or new entries of Indian and foreign banks offering a wider range of products and services, which could adversely affect its competitive environment. <p align="justify"><strong>Depends largely upon management team:</strong> The breadth of experience of bank's management team coupled with their in-depth knowledge of banking operations and management provides it the anchor to continue building a robust and sustainable organization. The bank's management's capabilities, strong reputation, extensive network of industry relationships, and extensive experience in the finance and banking industry are the key to its growth, modernization, and development. The bank relies heavily on the expertise and experience of its senior management personnel. The bank's performance and success depend largely on its ability to nurture and retain the continued service of management team and skilled personnel. Any increase in banks attrition levels may add to its expenditure on personnel. The bank's failure to retain its management team and skilled personnel or to attract new talent to aid its growth and carry out its strategies could materially and adversely affect business, prospects, financial condition, and results of operations.<p align="justify"><strong>Outlook</strong><p align="justify">Incorporated in 1920, CSB Bank is one of the oldest private sector banks in India. The bank has a significant presence in Kerala, Karnataka, Tamil Nadu and Maharashtra. It offers a wide range of products and services to its overall customer base of 1.3 million as on September 30, 2019, with particular focus on SME, Retail, and NRI customers. The bank's neighborhood centric focus has played a significant role in maintaining customer loyalty and its strong gold loan portfolio is a testimonial to the trust placed in its brand by its customers. The bank's Key Managerial Personnel bring substantial experience and in-depth knowledge of banking operations and management. On the flip side, the bank's business is highly dependent on its information technology systems, which require significant investment for regular maintenance, upgrades, and improvements. Therefore, if it is unable to adapt to rapid technological changes, or if there is any breach of its information technology systems or any failure of such systems to perform as expected, its business, reputation, and ability to service its customers could be adversely affected. Besides, volatility in the market price of gold may adversely affect bank's financial condition, cash flows, and results of operations. In addition, it may not be able to realize the full value of its pledged gold, which exposes it to potential loss.<p align="justify">The issue has been offered in a price band of Rs 193-195 per equity share. The aggregate size of the offer is around Rs 405.72 crore to Rs 409.93 crore based on lower and upper price band respectively. On the performance front, the bank's other income increased by 8.37% from Rs 1,254.2 million in fiscal 2018 to Rs 1,359.2 million in fiscal 2019. The bank's net loss after tax decreased by 48.31% from Rs 1,270.9 million in fiscal 2018 to Rs 656.9 million in fiscal 2019. The bank intends to introduce new products to widen its service offering as a full service Bank, while continuing to remain focused on SME customers by providing them support through the life cycle of their business, and also capitalize on the opportunity presented by retail banking by enhancing its product and service offerings and customer delivery capabilities. To support SME and Wholesale banking businesses, it also plans to launch capital market linked products including lending products linked to capital market instruments. Moreover, in order to further grow its retail loan portfolio and diversify its loan portfolio mix, the bank intends to mainly focus on gold loans, two wheeler loans, loans against property, and personal loans.<p align="justify"></p>
14-Nov-2019   11:59 Hrs IST Mangalam Global Enterprise coming with an IPO to raise up to Rs 21.57 crore <p align="justify"><strong>Mangalam Global Enterprise</strong><ul><li><div align="justify">Mangalam Global Enterprise is coming out with an initial public offering (IPO) of 42,30,000 equity shares of face value of Rs 10 each at a fixed price of Rs 51 per equity share</div></li><li><div align="justify">The issue will open on November 15, 2019 and will close on November 20, 2019</div></li><li><div align="justify">The shares will be listed on Emerge Platform of NSE</div></li><li><div align="justify">The share is priced 5.10 times of its face value of Rs 10</div></li><li><div align="justify">Book running lead manager to the issue is Pantomath Capital Advisors</div></li><li><div align="justify">Compliance Officer for the issue is Rutu Shah</div></li></ul><p align="justify"><strong>Profile of the company</strong><p align="justify">The Company was originally incorporated as ‘Hindprakash Colourchem Private Limited' as a Private Limited Company under the provisions of the Companies Act, 1956 vide Certificate of Incorporation dated September 27, 2010, issued by Registrar of Companies, Gujarat, Dadra and Nagar Havelli. Further, the name of the company was changed to ‘Mangalam Global Enterprise Private Limited' to signify the change in Company's operations, pursuant to shareholders resolution passed at Extra-Ordinary General Meeting of the company held on June 28, 2014 vide a fresh Certificate of Incorporation dated July 31, 2014 issued by Registrar of Companies, Ahmedabad. Subsequently, the Company was converted into a Public Limited Company pursuant to a special resolution passed by the shareholders at Extra-Ordinary General Meeting of the Company held September 17, 2019 consequent to which the name of the Company was changed to ‘Mangalam Global Enterprise Limited' vide a fresh Certificate of Incorporation dated September 30, 2019 issued by the Registrar of Companies, Ahmedabad.<p align="justify">Mangalam Global Enterprise was incorporated in 2010 and set up by Ahmedabad based Mangalam group. It is mainly engaged in the business of manufacturing of Refined Castor Oil First Stage Grade (F.S.G.), Castor De-Oiled Cake and High Protein Castor De-Oiled Cake for domestic and international markets. Castor oil mainly used in Lubricants, Paints, Sealants, Pharmaceuticals, Inks Cable Insulators, Textiles, and Rubber industries. Apart from this, it also manufactures Delineate Cotton Seeds and Cotton Bales (Lint Cotton). Mangalam Global also involved in the trading business of Raw Cotton and Castor Seeds. Farpoint Enterprise LLP (Farpoint) and Hindprakash Castor Derivatives Private Limited (HCDPL) are the two subsidiaries of Mangalam Global with 51% stake. Company's one cotton processing unit is located at Harij, Gujarat and two castor processing units located at Harji and Palanpur. Both the units have a capacity of producing 220 MT Castor De-Oiled Cake per day and 225 MT Castor Refined Oil (F.S.G.) per day. They supply their products in states such as Gujrat, Maharashtra, Rajasthan, Delhi, and West Bengal. Also, the company exports products in countries like Thailand and Oman.<p align="justify"><strong>Proceed is being used for:</strong><ul><li><div align="justify">Funding the working capital requirements of the company.</div></li><li><div align="justify">Meeting General corporate purposes.</div></li></ul><p align="justify"><strong>Industry Overview</strong><p align="justify">Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Narendra Modi, had launched the ‘Make in India' program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020. Production of hydrogenated castor oil has played a very crucial role in the cosmetic and chemical industry. The purpose of hydrogenation of castor oil is not only to improve the keeping qualities, taste and odor of the castor oil but also to raise the melting point of the oil. On the other hand, the use of Jamaican black castor oil has witnessed an upsurge in sales, owing to its unadulterated method of processing and its antifungal and antibacterial properties. Key players of castor oil market are anticipating strong performance in the Latin America castor oil market. Several manufacturers of castor oil are entering new markets through the acquisition of major regional players of castor oil, in order to enhance their product offerings and manufacturing facilities for castor oil. Moreover, companies are currently focusing on opening new innovation centers for castor oil in order to expand and boost their regional presence accordingly. Innovation and advancement to create a superior product from castor oil have been a vital strategy implementation by major companies. Companies in the castor oil market are investing significantly in research &amp; development to gain competitive advantage and create novel applications.<p align="justify">Cotton plays an important role in the Indian economy as the country's textile industry is predominantly cotton based. India is one of the largest producers as well as exporters of cotton yarn. The textile industry is also expected to reach $223 billion by the year 2021. The states of Gujarat, Maharashtra, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Haryana, Rajasthan, and Punjab are the major cotton producers in India. Cotton yarn and fabrics exports accounts for about 23% of India's total textiles and apparel exports. In 2017-18, India's cotton production was 34.86 million bales of 170 Kgs. Each Between April-October 2018, total textile and clothing exports stood at Rs 1.52 trillion ($21.95 billion). Between April-October 2018, exports of cotton raw including waste, cotton yarn, cotton fabrics and cotton made-ups grew by 26.01 percent year-on-year to $6,893.05 million from $5,470.20 million during the same period last year. The US Department of Agriculture's (USDA's) first 2019/20 world cotton projections anticipate that production will exceed consumption, raising world stocks slightly, by 1 million bales. World cotton production is expected to rise 6.8 percent with yields rebounding in a number of countries and area also rising. Global consumption is expected to continue growing, but at a rate slightly below its long-run average. It is expected that China will continue to gradually expand imports following years of significant limitations in import access applied to facilitate disposal of surplus government-held stocks. The A Index is forecast to decline by 5 cents to 80 cents per pound due to projected higher stocks outside of China. US 2019/20 cotton production is expected to rise to 22.5 million bales, based on a slight increase in planted area, and sharply lower abandonment. Domestic mill use is projected marginally above the 2018/19 level, and exports are expected to rise, but ending stocks are also projected higher.<p align="justify"><strong>Pros and strengths</strong><p align="justify"><strong>Experienced Management Team:</strong> The management team is experienced in the industry in which it is operating and has been responsible for the growth of its operations and financial performance. Its Promoter Vipin Prakash Mangal leads the company with his vision. They have an adequate experience in the line of the business undertaken by the company and look after the strategic as well as day to day business operations. The strength and entrepreneurial vision of the Promoters and management have been instrumental in driving its growth and implementing its strategies. A motivated and experienced employee base is essential for maintaining a competitive advantage. Its technical operations at manufacturing facility are being managed by experienced personnel and supervisors who are well versed with its Industry and business undertaken by the company. It is dedicated to the development of the expertise of employees and continues to invest in them to ensure that they have the necessary training required to be successful in today's challenging environment. Its motivated team of management and key managerial personnel complements each other to enable the company to deliver high levels of client satisfaction.<p align="justify"><strong>Quality Control and Quality Assurance:</strong> The company has the practice of testing the products for quality before they are dispatched to the customers and have the quality control department which looks after the quality, strength and the durability of the products. Quality is an ongoing process of building and sustaining relationships. All the products are being manufactured strictly as per quality norms using the expertise of its experienced team. Its commitment of providing quality products is boasted by its industry knowledge. Its manufacturing facility has fully equipped quality control department with experienced and qualified staff to facilitate smooth manufacturing process. It has in-house testing laboratory and necessary infrastructure to test its raw materials and finished products to match the quality standards and as specified by the relevant customers.<br><p align="justify"><p align="justify"><strong>Scalable Business Model:</strong> Its business model is scalable. Its Business model is customer centric and order driven, and requires optimum utilization of its existing resources, assuring quality supply and achieving consequent economies of scale. The business scale generation is basically due to development of new markets both domestic and international by exploring customer needs and by maintaining the consistent quality output.<p align="justify"><strong>Risks and concerns</strong><p align="justify"><strong>High volume-low margin business:</strong> Its business is a high volume low margin business. Its financial operations are largely dependent on the volume of the business it generates which will add to profits in absolute terms. It needs to generate higher volume in terms of quantity to increase its profitability to make its products commercially feasible. Its inability to regularly grow its turnover and effectively execute its key business processes could lead to lower profitability and hence adversely affect its operating results, debt service capabilities and financial conditions. Due to the nature of the products it sells, it may not be able to charge higher margins on its products. Hence, its business model is heavily reliant on its ability to effectively grow its turnover and manage its key processes including but not limited to procurement of raw material/ traded goods, timely sales/ order execution and continuous cost control of non-core activities.<p align="justify"><strong>Highly competitive:</strong> Both castor oil and cotton product segments are highly competitive. Increasing competition may subject the company to pricing pressures and require it to reduce the prices of its products and services in order to retain or attract customers, which may have a material adverse effect on its revenues and margins. Further, many of its competitors are larger international and domestic companies and have access to greater resources or may be able to develop or acquire technology or partner with innovators or customers at terms which are not presently feasible for it, due to its current scale of operations. Any failure to keep abreast with technological advancements might place its competitors at an advantageous position in terms of cost, efficiency and timely delivery of final products. While it is focused on developing cost and time efficiencies and to broaden its product range, in particular in certain niche segments, in the event its competitors develop better process technology or improved process yield or are able to source raw materials at competitive prices, and are therefore able to create new products or substitutes for its products at competitive prices, it may not be able to maintain its growth rate and revenues and its profitability may decline. Any of these factors may have a material adverse effect on its business and prospects.<p align="justify"><strong>Working capital intensive business:</strong> Its business is working capital intensive. A significant portion of its working capital is utilized towards inventories, trade receivables and trade payables. Its inability to maintain sufficient cash flow, credit facility and other sources of fund, in a timely manner, or at all, to meet the requirement of working capital could adversely affect its financial condition and result of its operations.<p align="justify"><strong>Outlook</strong><p align="justify">The Company is mainly engaged in the business of manufacturing of refined castor oil (First Stage Grade - F.S.G.), Castor De-oiled cake and High Protein Castor De-oiled cake for domestic and international markets. It has also diversified in the manufacturing of cotton bales (Lint Cotton) and Delineate Cotton Seeds. Currently, it trades in Castor Seeds and Raw Cotton. Cotton bales manufacturing activities started in the year 2018. It has recently started a business of wholesale trading in Singapore through its wholly-owned subsidiary. Its revenue mix also signifies that it has been able to maintain a market in its products. Such diversified business model reduces its dependency on a particular industry and ensures flow of revenues throughout the year. On the concern side, the company has a very limited operating history of its manufacturing operations, which may make it difficult for investors to evaluate its historical performance or future prospects. Further, its business is subject to seasonal volatility, which may contribute to fluctuations in its results of operations and financial condition.<p align="justify">The company is coming out with a maiden IPO of 42,30,000 equity shares of Rs 10 each at a fixed price of Rs 51 per equity share to mobilize Rs 21.57 crore. On the performance front, its total revenue amounted to Rs 14,592.77 lakh for the period ended June 30, 2019, while its profit after tax for the period ended June 30, 2019 was Rs 105.38 lakh forming 0.72% of its total revenue. Besides, its total revenue increased by 1126.98% to Rs 33,003.73 lakh for the financial year 2018-19 from Rs 2,689.83 lakh for the financial year 2017-18. Its profit after tax increased by 737.97% to Rs 216.97 lakh for the financial year 2018-19 from Rs 25.90 lakh for the financial year 2017-18.<p align="justify">The company has marked its presence in both domestic as well as global markets. In order to cater increasing demands for Castor oil and to capitalize on the opportunities in the international market, the company has decided to foray into export operations. It has recently started exporting its Castor products to countries such as Thailand, Oman. Its growth strategy for exports will vary from country to country. It may either form important relationships with companies with strong local presence or alternatively appoint local distributors through which it can undertake its business.</p>
07-Nov-2019   14:53 Hrs IST Anuroop Packaging coming with an IPO to raise up to 2.64 Rs crore
30-Sep-2019   11:44 Hrs IST Sona Hi Sona Jewellers (Gujarat) coming with an IPO to raise up to Rs 4.50 crore
30-Sep-2019   10:59 Hrs IST Goblin India coming with an IPO to raise up to Rs 15.20 crore
30-Sep-2019   10:24 Hrs IST Tutorials Point India coming with an IPO to raise up to Rs 20.10 crore
27-Sep-2019   15:49 Hrs IST Gensol Engineering coming with an IPO to raise up to Rs 17.93 crore
27-Sep-2019   15:20 Hrs IST IRCTC coming with an IPO to raise upto Rs 645.12 crore
26-Sep-2019   15:08 Hrs IST Vishwaraj Sugar Industries coming with an IPO to raise upto Rs 60 crore
21-Sep-2019   15:45 Hrs IST Misquita Engineering coming with an IPO to raise up to Rs 1.93 crore