Mukka Proteins IPO subscribed 60x so far on last day; NII portion booked about 150 times

The initial public offering (IPO) of Mukka Proteins continued to witness a strong response from the investors during the third and last day of the bidding process. The issue was overall subscribed 2.47  times on day one and ended day two with a 6.96 times subscription.

The Mangaluru-based Mukka Proteins is selling its shares in the price band of Rs 26-28 apiece. Investors can apply for a minimum of 535 shares and its multiples thereafter. It is looking to raise Rs 224 crore via IPO, which entirely includes a sale of 8 crore fresh equity shares.

According to the data, the investors made bids for 3,35,65,41,850 equity shares, or 59.94 times, compared to the 5,60,00,435 equity shares offered for the subscription by 1.40 pm on Monday, March 4. The bidding for the issue, which had kicked-off on Thursday, February 29, concludes today.

The allocation for non-institutional investors was subscribed 148.99 times, while the portion reserved for retail investors saw a subscription of 38.15 times. However, the quota set aside for qualified institutional bidders (QIBs) attracted bids for 31.27 times as of the same time.

Mukka Proteins, which was incorporated in March 2003, specializes in the production of fish protein products. The company manufactures and delivers fish meal, fish oil, and fish soluble paste, crucial components for aqua feed used in fish and shrimp farming, as well as poultry feed for broilers and layers, and pet food for dogs and cats.

The grey market premium of Mukka Proteins has surged sharply after day one's response as the company is commanding a premium of Rs 28-29 in the unofficial market, suggesting a listing pop of more than 100 per cent for the investors. However, the premium in the grey market stood around Rs 15-17 earlier, when the issue was announced.

Analysts are mostly positive on the issue on the back of rising demand for fish proteins and fish oil across various sectors, expansion plans in more countries and strong financial performance. However, they have flagged dependance on some big players and changes in policy and licensing may pose challenges to the company.

Mukka Proteins is one of the leading companies for manufacturing and marketing of fish meal, fish oil and allied products in domestic and global markets. It sells its products domestically and exports them to over 10 countries- Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan and Vietnam, said Anand Rathi Research.

"The company has around 25-30 per cent market share in India that has two-third coastal land. At the upper price band, the company is valued at P/E of 17.7 times with a market cap of Rs 840 crore post issue of equity shares. We believe that valuations of the company are fairly priced and recommend a 'subscribe for long term' rating to the IPO," it added.

Ahead of its IPO, Mukka Proteins raised Rs 67.2 crore from anchor investors as it allocated 2.39 crore shares at Rs 28 apiece. The company has reserved 50 per cent of the offer to qualified institutional bidders (QIBs), with non-institutional investors receiving 15 per cent, and the remaining 35 per cent allocated to retail investors.

Mukka Proteins has a rich legacy of around five decades in the Indian Marine Industry and is one of the pioneers in the fishmeal industry having set up one of India’s first steam sterilised fishmeal plants. In fiscal 2023, the industry is estimated to see a huge jump in value as well as volume, said  Master Capital Services

"The company posted YoY growth of 130-150 per cent in value terms and 90-110 per cent in volume terms and aims to increase market share by meeting customer demand for fish meal and fish oil. It sees huge potential and demand in insect based nutrition and has entered into the business of manufacturing and selling insect meal and insect oil," it said with 'subscribe' rating.

Fedex Securities is the sole book running lead manager of the Mukka Proteins IPO, while Cameo Corporate Services is the registrar for the issue. Shares of the company are likely to be listed at the bourses on both BSE and NSE with March 7, Thursday as the tentative date of debut.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.