Apex Frozen Foods Limited’s IPO opens on 22nd August 2017, Price Band fixed at Rs 171 – Rs. 175

L to R- T. R. Prashant Kumar(Karvy Investment services), K. Satyanarayana Murthy (Managing Director), K. Subrahmanya Chowdary (Executive Director), Apex Frozen Foods IPO Press Conference- Photo By Sachin Murdeshwar GPN NETWORKL to R- T. R. Prashant Kumar(Karvy Investment services), K. Satyanarayana Murthy (Managing Director), K. Subrahmanya Chowdary (Executive Director), Apex Frozen Foods IPO Press Conference- Photo By Sachin Murdeshwar GPN NETWORK

Integrated producers & exporters of shelf stable, ready-to-cook products to a diversified customer base consisting of food companies, retail chains, restaurants, club stores & distributors spread across the developed markets of USA, UK & European countries

à For Fiscal 2017, exports to USA accounted for 82.0% where as exports to UK and various European countries account for 17.8% of sales

à The proceeds from the IPO are proposed to be used in setting up a new shrimp processing unit with a proposed capacity of 20,000 MTPA at East Godavari District, Andhra Pradesh

à Over the period of five years, between Fiscal 2013 and 2017, revenues grew at a CAGR of 29.10% to Rs. 7,096.80 million in Fiscal 2017, with a return on Net Worth of 25.22%
Mumbai, 16th August (GPN) : Apex Frozen Foods, a profitable integrated producer & exporter of shelf stable quality aquaculture products with over two decades of experience, announced an Initial Public Offering (IPO) to finance its expansion program. The IPO of upto 87,00,000 equity shares of face value of Rs. 10 each for cash at a premium offered through a book-building route at a price-band of Rs. 171 – Rs. 175 per equity share aggregating Rs. 148.77 crores – Rs. 152.25 crores. The issue will comprise of Fresh Issue of 7,250,000 equity shares and an Offer for Sale of 1,450,000 equity shares by the Promoter & Promoter group members. The Book Running Lead Manager is Karvy Investor Services Limited. The IPO would open for public subscription on 22nd August and close on 24th August with subscription for Anchor Investors opening on 21st August 2017. The shares will be listed on NSE and BSE.

The Company’s total revenues grew from Rs. 2,554.8 million in Fiscal 2013 to Rs. 7,096.8 million in Fiscal 2017 with a return on Net worth of 25.22% in Fiscal 2017. The company has a sizeable farming operation spread across 1,337.69 acres of land. Apex Frozen Foods Limited proposes to utilise the net proceeds from the fresh Issue towards the setting up a new shrimp processing unit with a proposed capacity of 20,000 MTPA at East Godavari District, Andhra Pradesh and for general corporate purposes. The Company’s processing facility is located at Kakinada, Andhra Pradesh with a capacity to process over 9,240 MTPA of finished products and an additional pre-processing & processing arrangement at a facility owned by Royale Marine Impex Private Limited located at Bapatla, Andhra Pradesh, having a capacity to process around 6,000 MTPA. The processing facilities are supplemented by cold storage facilities located at Kakinada & Bapatla. Along with this, to further assuage the Company’s operations, it has its own fleet of vehicles with freezing capabilities. The facility is approved by the Export Inspection Council for export to various developed nations including USA, UK and various European Countries.

The Company draws its strengths through its economies of scale on account of integrated operations ─ sourcing raw materials partly through its own faring initiative, strategically located processing plant, established customers base, focus on quality control measures, research & development initiatives, and proven & experienced management.

The operational facilities are strategically located along the coastal belt of Andhra Pradesh. The facility is approximately 20 Kms from Kakinada port and approximately 150 Kms from Vishakhapatnam port, thereby providing a substantial logistical advantage for the transport of the export ready finished product. As per the Restated Standalone Financial Statements, the Company’s total revenues have grown from Rs. 2,554.83 million in Fiscal 2013 to Rs. 7,096.80 million in Fiscal 2017, at a CAGR of 29.10%, and the Company’s profit after tax, as restated, has increased from Rs. 94.15 million in Fiscal 2013 to Rs. 244.05 million in Fiscal 2017, at a CAGR of 26.89%. Seafood is an important source of nutrition & livelihood for millions of people worldwide. Global seafood consumption is expected to reach 170-175 million tonnes by Financial year 2021.  The global aquaculture market is gaining share over the marine catch industry is expected to increase to 52% share by 2020. USA is the largest importer of aquaculture products, accounting for nearly 18% of the total imports in 2015. Going forward, demand from USA is expected to keep rising and reach 22% by 2020.

India is amongst the leading countries in seafood exports and aquaculture production. India’s export market grew at a CAGR of 10% to $ 4.7 billion between 2010-11 and 2015-16 and is expected to reach $7 billion by 2020-21 India’s share in export of aquaculture products increased by ~330 bps to 7.8% between 2010 and 2015 and is expected to reach 10-12% by 2020. Of the total exports from India, USA was the top-most destination at 28%, and is subsequently expected to reach 30-32% by 2020-21. Of the total aquaculture production in India, close to 80% is exported while the rest is sold in the domestic market. Andhra Pradesh (AP) is the most favorable state in India for aquaculture business with the government offering subsidies/incentives for setting up farms and processing units as well as purchasing feeds. In 2015-2016, the state accounted for 77-79% of total pacific white leg shrimp export.

About the Author

Sachin Murdeshwar
Sachin Murdeshwar is a Sr.Journalist and Columnist in several Mainline Newspapers and Portals.He is an ardent traveller and likes to explore destinations to the core.

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