Uma Exports Shares List At Above 10% Premium. Should You Hold
Friday, April 8, 2022
Uma Exports Shares List At Above 10% Premium Should You Hold?
Tomorrow‚ Uma Exports will debut on the stock market. This B2B trading company focuses on sugar‚ corn‚ dal‚ and lentils. Its products include pigeon peas‚ faba beans‚ and lentils. It has an OPM and NPM below 2%. The stock is cheap‚ and it has a good revenue growth over the past three years.
Uma Exports' IPO was subscribed 7.67 times
The company was incorporated in 1988 and engages in the trading and marketing of agricultural products. It also exports products to markets outside India‚ including the UAE‚ Sri Lanka‚ and Bangladesh. It primarily deals in sugar‚ spices‚ grains‚ pulses‚ and agricultural feed such as soybean meal. The company has high debt and a somewhat muted business profile. Therefore‚ it's important to evaluate the IPO prospectus carefully. The company has a price band of Rs 65 to 68 for its IPO. The issue will list on April 7‚ 2022‚ with a GMP of Rs _. The company has received over 767 percent of the issue size and has an initial price band of Rs 68. The company has been successfully subscribed to the IPO by investors across the country. The issue price was priced in the mid-range of Rs 65-68 per share‚ and it has received a high number of bids. After the IPO was closed‚ shares of Uma Exports began trading on the National Stock Exchange (NSE) at a premium of 17.6 percent. While the company's IPO price is higher than the issue price‚ investors still aren't satisfied with that number. The company's stock price has continued to rise since its listing on the NSE. Its stock price touched a high of Rs 83 on Thursday‚ while the BSE Sensex index dipped 0.6 percent at 10:10 AM. This IPO was a fresh issue of equity shares valued at Rs 60 crore. The company will use the proceeds of the IPO to raise future working capital. Its overall sanctioned limit is Rs 95 crore‚ with the proceeds from the IPO financing the company's working capital requirements. However‚ analysts at Ventura Securities pointed out that Uma Exports' FY23 working capital requirement will likely be Rs 260 crore. The company's IPO proceeds will also finance short-term borrowings and internal accruals.
It is priced reasonably
The company was incorporated in 1988‚ and since then has specialized in the trading‚ marketing and distribution of agricultural commodities. It also exports various types of spices‚ including coriander‚ cumin‚ and dry red chillies. The company also deals in other agricultural products‚ including food grains and pulses. Its products are distributed to various international and domestic institutions‚ including food and feed manufacturers. Shares of Uma Exports are fairly priced and investors can buy them now. The company has strong financials and operationals‚ which help explain why the share price is reasonably priced. However‚ investors should remember that the company operates in a challenging environment with low margins and limited scope for boosting earnings. Moreover‚ Uma Exports' core business is trading and sourcing‚ so there is little scope for value addition or branding. Its IPO price is reasonable at 18x P/E. If you are planning to invest in this company‚ be sure to invest in its IPO. Its IPO was subscribed more than seven times by retail investors. The company intends to use the net proceeds from the issue for general corporate and working capital. The company will float its shares to meet the needs of its growing business. If you are a small investor‚ you should consider investing in the company. Its shares are reasonably priced and can help you diversify your portfolio.
It has good revenue growth over the previous three years
Uma Exports has submitted a draft red herring prospectus to the SEBI for an IPO. The proposal seeks to raise Rs 600 crore through an IPO. The company plans to sell ten share units to investors. The company plans to use the proceeds from the IPO to meet the company's FY23 working capital requirements. The company is pursuing a backward integration strategy that focuses on cutting procurement costs and freight charges. The initial public offering of Uma Exports has highlighted the company's strong revenue growth over the past three years‚ despite a temporary decline in income for the next three years. Uma Exports is a trading firm that deals in agricultural products‚ commodities‚ and feed. Its IPO is small‚ but its price to earnings ratio is relatively reasonable (18x). The company's IPO is priced between 65 and 68 rupees per equity share. Uma Exports sells agricultural products to countries across the world‚ including Bangladesh‚ Malaysia‚ and Sri Lanka. Its revenues have increased by about 50 percent in each of the last three years. Its IPO is priced between 65 rupees and 68 rupees per equity share‚ so investors can purchase shares at a low price and benefit from the IPO price increase. While the IPO price may not be appealing for investors‚ the company's earnings and revenue growth will be good. The IPO will close on March 30‚ with the price band being Rs65-68 per equity share. The company is targeting a revenue of Rs 60 crore through this offering. This is a high-risk investment‚ so a careful consideration is needed. The company is a distinguished agricultural product importer and exporter.
It has low OPM and NPM
While Uma Exports shares have low OPM‚ it's worth considering because it generated good income growth over the past three years. Its revenues will experience a temporary drop in 2021 due to covid-19. The company deals in agricultural feed‚ rice‚ soybean meal‚ and branded oil cakes. It has a price-to-earnings ratio of 18x and a modest IPO size. The company has been growing its income every quarter for three years‚ and its shares have a low OPM and NPM. The company specializes in marketing agricultural products and gives them to exporters and manufacturers. It also imports bulk amounts of products from abroad. Hence‚ it supplies agricultural products both domestically and internationally. But the IPO is priced low. If the IPO is priced reasonably‚ investors can expect the company to grow in the future. The company is expected to go public on March 28. Its IPO is likely to have low OPM and NPM‚ but it will be difficult to predict the performance of its shares until the company has released its financial statements.