Apex Frozen Foods makes strong BSE debut, jumps 14% over issue price

The company offers processed white shrimp under brands Bay fresh, Bay Harvest and BayPremium. NSEBSEAvanti FeedsLoading data…

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      ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES NEW DELHI: Apex Frozen Foods made a stellar debut on the bourses on Monday by listing at Rs 199.90 on BSE, a 14.23 per cent premium over its issue price of Rs 175.

      The company’s Rs 152 crore IPO, which was sold between August 22 and August 24, was subscribed 6.14 per cent.

      The company offers variants of processed white shrimp under brands like Bay Fresh, Bay Harvest and BayPremium. The proceeds from the issue will be utilised for setting up a new shrimp processing unit with a capacity of 20,000 tonnes per annum in Andhra Pradesh and for general corporate purposes.

      Analysts noted that at the issue price, the stock was available at a PE of 22.4 times based on FY17 earnings, which is justified considering the company’s strong execution capability, healthy international customer base, strong R&D focus, farms in favourable coastal belt, low net debt equity, increased value added proportion and expanding global reach.

      Listed players such as Avanti Feeds, The Waterbase and Zeal Aqua are among key competitors of Apex Frozen. Return on net worth for Avanti Feeds stood at 34.78 per cent for FY17 on a standalone basis and 36.71 per cent on a consolidated basis. Smaller peers The Waterbase and Zeal Aqua have RoNW of 11.20 per cent and 4.83 per cent, respectively. In comparison, Apex Frozen reported an RoNW of 25.22 per cent. The size of the export market for shrimp stood at $ 3.1 billion in 2015-16.

      Some estimates show shrimp exports grew at a CAGR of 33 per cent between FY10 and FY15. Volumes grew 22 per cent, while realisations rose 11 per cent. Rating agency CRISIL expects shrimp exports to grow at a CAGR of 17-19 per cent in value terms over the next five years, primarily driven by volumes.

      Volumes for the industry are expected to grow at a CAGR of 11-13 per cent. Realisations may grow at 6 per cent, the rating agency expects.

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