After a long time we have seen some mainline IPO and this is going to be a big event this time. Secondary markets are very volatile. Ongoing global issues like the tussle between Ukraine and Russia, increasing inflation and galloping commodity prices. Uma Exports Limited has come up with their small IPO in the end of financial year.
Main Business of Uma Exports Limited
Promoted by Mr RAKESH KHEMKA AND Mrs SUMITRA DEVI KHEMUKA Uma Exports Limited was incorporated in year 1988.
Company trades, markets & distributes agricultural products which includes sugar, wheat, rice, spices, coriander, dry red chillies, cumin seeds, pulses, corn, sorghum,food grains, etc. Company is doing exports of these agricultural products to Malaysia and Sri Lanka besides Bangladesh in recent years.
It is a B2B trader that supplies products to exporters and manufacturers in bulk quantities. The company import lentils, fava beans, black Urad dal and tur dal in India in bulk volumes from Australia, Canada, and Burma.
Company’s Business Strategies
As Uma Exports Limited import lentils, fava beans, black Urad dal and tur dal majorly from Canada, Australia and Burma. They are in process of setting up a procurement office in Australia through a wholly owned subsidiary, which will allow them to buy the commodities directly in Australia through such Australian office and dispatch the commodities directly to various other global locations. This move will enable in saving costs like freight and import duties and improving the profitability.
Vessel load procurement
Company buy the commodities in a container or by sharing the vessel load. Procurement of commodities through vessel has larger economies of scale as compared to a container. Company is focussing on saving by reduced costs such as freight, duties etc. if the commodities are procured through a vessel. This will cause better profitability for the Company. Our Company is continuously thriving to start various steps to reduce the costs attached with procurement of agricultural produce and commodities.
Focusing on increasing the exports
Uma Exports Ltd primarily exports sugar to UAE, Sri Lanka, & Afghanistan and corn to Bangladesh. In the financial years 2021, 2020 and 2019, exports made up 9.53%, 5.42% and 37.64% respectively of our total income. With the planning of infusing additional capital, a company can bid and take part in for bigger tenders and as a result export larger sizes than before.
Objective of the IPO
Our Company proposes to use the Net Proceeds from the Issue towards the following objects:
- Enhancement of working capital requirements
- General Corporate Purposes
Company will utilise the fund in enlarging of capacity of acquiring larger supply contracts and this will enhance Company’s corporate image, brand name and create a public market for Equity Shares in India.
You can see in the mentioned image that company is going to collect 60 crores from this issue: However they have disclosed the utilisation of 50 crores in the DHRP dated 15 Mar 2022.
- Company has a good track record of growth and profitability.
- Having experienced management team enables then to improve financial results over the years and increase portfolio of the products in the market.
- Company has build up a long-term relationship with clients and new business.
- They have a presence in multiple geographical locations to operate in agricultural commodities trading segment.
Weak Points about Company
- As Uma Exports Limited is dealing globally for export and import of agri commodities, any major geopolitical issue could impact the business of the company.
- The export / import of certain agricultural products and commodities is subject to seasonal factors. Inability to forecast the demand for products, may have an adverse effect on the company’s business.
- Company is subject to foreign exchange control regulations which can pose a risk of currency fluctuations, results of operations, cash flows and financial condition.
- The company have few outstanding cases of direct taxes:
Litigations involving Uma Exports Ltd
There are two outstanding cases of Direct Tax against Uma Export limited involving 49.97 Crore rupees.
Litigations against our Promoters
There is an outstanding case of Direct Tax against promoters of Uma Exports Limited involving the total amount of Rupees 3.483 Crore.
Cost of Acquisition of Shares for Promoters
The average cost of acquisition of Shares for the Promoters is:
|Name of Promoter||No. of shares held||Average Cost of Acquisition (in ₹)|
|Sumitra Devi Khemka||25,76,800||7.15|
Important dates and price band of Uma Exports Limited IPO
Company is coming up with IPO through book building process with details as:
Opening date of Uma Exports limited IPO: Mar 28, 2022.
Closing date of IPO: Mar 30, 2022.
Price band of Uma Export Limited IPO: ₹65 to ₹68 per equity share.
Market lot and minimum application: 220 Shares.
Issue Size: Eq Shares of ₹10
(aggregating up to ₹60.00 Cr).
Fresh Issue: Eq Shares of ₹10
(aggregating up to ₹60.00 Cr).
|QIB Shares Offered||50% of the net offer|
|Retail Shares Offered||35% of the net offer|
|NII (HNI) Shares Offered||15% of the net offer|
Uma Exports Limited IPO Timetable
The Uma Exports Limited IPO open date is Mar 28, 2022, and the close date is Mar 30, 2022. The issue may list on Apr 7, 2022.
|IPO opening||Mar 28, 2022|
|IPO closing||Mar 30, 2022|
|Basis of allotment||Apr 4, 2022|
|Initiation of refunds||Apr 5, 2022|
|Credit of shares to demat||Apr 5, 2022|
|IPO listing date||Apr 7, 2022|
Uma Exports IPO Lot Size
The market lot size for Uma Exports IPO is 220 shares. A retail-individual investor can apply for up to 13 lots (2860 shares or ₹194,480).
Uma Exports Limited IPO promoter holding
|Pre Issue Share Holding||98.13%|
|Post Issue Share Holding||Will be as per allotment|
As the IPO is tiny and limited shares will be available, there could be a good demand for the IPO of Uma Exports Limited. Business is very small and competitive in nature. Still investors should apply for moderate listing gains.
Grey Market premium of Uma Exports Limited
Currently grey market premium for Uma Exports limited is Rs 5 to Rs 12.
All these details and informations are available in the DHRP of Uma Exports Limited at SEBI website. You can refer full details on this link
You can get more details about Upcoming IPOs at our Blog Page