Freshara Agro Exports Limited, a leading exporter of preserved gherkins and other pickled commodities, has launched its ₹75.39 crore Initial Public Offering (IPO) today. The IPO is a book-built issue consisting entirely of a fresh issue of 64.99 lakh shares, with the price band set between ₹110 to ₹116 per share. The subscription period for the IPO opens on October 17, 2024, and closes on October 21, 2024.

The minimum lot size for retail investors is 1,200 shares, translating to a minimum investment of ₹1,39,200. For High-Net-Worth Individuals (HNIs), the minimum investment is 2 lots (2,400 shares), amounting to ₹2,78,400. GYR Capital Advisors Private Limited is acting as the book-running lead manager, while Purva Sharegistry (India) Private Limited serves as the registrar. Giriraj Stock Broking Private Limited will act as the market maker for this IPO.

Live Subscription Status: Strong Response on Day 1

As of 11:30 AM on October 17, 2024, the Freshara Agro Exports IPO has already been subscribed 2.02 times on the very first day of its subscription period. Investors can keep track of the live subscription status on the NSE website, ensuring they stay updated with real-time figures throughout the subscription phase.

Anchor Investors and Financial Backing

Freshara Agro Exports raised ₹20.43 crore from anchor investors at a price of ₹116 per share in consultation with the book-running lead managers. The company allocated 17,61,600 equity shares to these investors, reflecting a strong belief in its business model and future growth.

Company Overview and Financial Performance

Freshara Agro Exports specializes in the procurement, processing, and export of preserved gherkins and pickled commodities, exporting to various countries worldwide. The company focuses on sustainable agricultural practices and directly sources products from accredited farms and farmers. It enters into buy-back agreements with farmers, providing them with necessary sowing materials such as seeds.

The company's financial performance has been promising, with revenues from operations showing consistent growth over the years:

  ▪ FY2021-22: ₹11,840.68 lakh

  ▪ FY2022-23: ₹12,700.22 lakh

  ▪ Period ended January 23, 2024: ₹12,476.60 lakh

  ▪ Period from January 24, 2024, to March 31, 2024: ₹7,324.98 lakh

Additionally, the company's EBITDA for the respective periods has been:

  ▪ FY2022: ₹495.41 lakh

  ▪ FY2023: ₹1,749.30 lakh

  ▪ Period ended January 23, 2024: ₹2,176.09 lakh

  ▪ Period from January 24, 2024, to March 31, 2024: ₹1,385.66 lakh

The company reported profit after tax figures of:

  ▪ FY2022: ₹97.36 lakh

  ▪ FY2023: ₹908.20 lakh

  ▪ Period ended January 23, 2024: ₹1,185.64 lakh

  ▪ Period from January 24, 2024, to March 31, 2024: ₹996.77 lakh

IPO Valuation and Grey Market Premium (GMP)

The pre-issue EPS is ₹12.83, and post-issue EPS is ₹9.29. The pre-issue P/E ratio stands at 9.04x, while the post-issue P/E ratio is 12.49x, reflecting a reasonably priced offering.

The Grey Market Premium (GMP) for the Freshara Agro Exports IPO is currently ₹35, indicating potential listing gains of approximately 30%. However, it's important to note that GMP is driven by market speculation and does not guarantee price discovery before listing. Investors should consider this information as educational only and not base their investment decisions solely on GMP trends.

IPO Allotment and Listing Dates

The IPO allotment is expected to be finalized on October 22, 2024, and investors can check their allotment status by visiting the Registrar's website. Here's how you can check:

  ▪ Go to the allotment status page.

  ▪ Select Freshara Agro Exports Limited IPO from the dropdown.

  ▪ Enter your application number, PAN, or DP Client ID.

  ▪ Submit to view your status.

  ▪ The tentative listing date on the NSE SME platform is set for October 24, 2024.

Objectives of the Issue

The proceeds from the Freshara Agro Exports IPO will be used for the following purposes:

 1. ₹879.97 lakh for capital expenditure.

 2. ₹5,600 lakh for funding working capital requirements.

 3. General corporate purposes.

 4. To meet the issue expenses.

Company Leadership

The company is led by Mr. Junaid Ahmed and Mr. Iqbalahmed Khudrathullah Mohammed, who have over 9 years of experience in the gherkins and pickled vegetable export business. Their leadership has helped Freshara Agro Exports become a prominent player in the industry.

Investment Recommendations

Considering the company's financial performance, the reasonable valuation of the IPO, and the strong subscription rates, this IPO could offer attractive listing gains. However, it is best suited for risk-tolerant investors looking for either short-term gains or long-term investments in the agri-export sector.

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