Uma Exports shares made a positive listing on the stock exchanges on Thursday, despite bearish market sentiment. Shares of the trader of agricultural products and commodities began trading at Rs 80 per share, up 17.65% from the upper end of IPO price band of Rs 68 per share. The overall market sentiment was negative as Sensex and Nifty were down in the red for the third consecutive session. Uma Exports IPO was subscribed 7.67 times earlier last month with all investor categories oversubscribing their portion of the issue.
The IPO of Uma Exports was entirely a fresh issue of equity shares worth Rs 60 crore. From the money raised, Uma Exports plans to use Rs 50 crore for future working capital requirements. “The company has a total sanctioned limit of working capital facilities of Rs 95 crore, while the working capital requirement in FY23 is expected to be Rs 260 crore as the company is planning to bid for and participate in bigger export-import tenders. This requirement will be financed by IPO proceeds, internal accruals and other short term borrowings,” said analysts at Ventura Securities. The brokerage firm had said that investors may wait for the post listing financial performance of the company before investing.
Uma Exports IPO was subscribed 2.81 times by Qualified Institutional Buyers (QIB) while Non-Institutional Investors (NII) had bid for the IPO 2.22 times their reserved portion. Retail investors were the largest bidders of the issue, subscribing it 10.11 times. This took the overall subscription to 7.67 times. Promoter and Promoter group shareholding has come down to 72.51% post IPO from 98.12% earlier. Public shareholding has increased to 27.49% from 1.88%.
Mardwadi Financial Services had an ‘Avoid’ rating on the issue saying that the company operates in a competitive environment with low margins profile and does not offer much value to the investors. “Considering the FY21 adjusted EPS of Rs 3.63 on a post-issue basis, the company is going to list at a P/E of 18.71x with a market cap of Rs 2,299 mn whereas its peer namely Sakuma Exports is trading at a P/E of 16.20x,” they added. Uma Exports registered a net profit of in the last three financial years.
As of September 30, 2021, and March 31, 2021, Company’s outstanding total fund based indebtedness stood at Rs 5,628.20 lakhs and Rs 3,861.81 lakhs, respectively, Hem Securities highlighted in a note. “Company being into trading and marketing of agricultural produce and commodities has debt on the books. Although the company’s other ratios like margin & return on shareholder’s fund are better than its peer but looking after business profile & debt condition, we recommend “Avoid” on the issue,” they added.