Keventer Agro Limited IPO Review

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Keventer Agro Limited is a company of the Keventer Groups. The company was founded in 1986. The company is engaged in the business of food processing. The company is a rapidly growing company with a huge market presence in Eastern and North-Eastern India. The company has a diversified business operation. It is engaged in the business operation of dairy service, frozen foods, bananas, hospitality franchisees, food Export business, and beverage franchisees’ core business. Grab Keventer Agro IPO details that all you need to know.

The company was also a partner in the country’s Initial Dairy Venture that happened in 1996. Through this venture, the company gained funding from the World Bank for its Phase III Program. The company owns the venture business now completely. The Metro Dairy is now a subsidiary of Keventer Agro. The company has a solid distribution network. It has 2300 dealers and 150,000 retail stores. The company also owns nearly 35 super C/F agents. The company also has a dry warehouse facility and a logistics centre of 400,000 sq. ft. The company has also achieved ISO 22000 quality certifications. The company also has a manufacturing unit in Barasat. The facility is spread over 92 acres. The manufacturing team is one of the largest manufacturing units of UHT milk.

OBJECTS OF THE IPO ISSUE:

  • Prepayment of all the loans of the company, which be availed on a consolidated basis. 
  • To meet corporate targets. 
  • To fund the working capital requirement.   

KEVENTER AGRO IPO DETAILS:

Keventer Agro Limited company has its headquarters in Kolkata. The company has recently submitted their DRHP to the SEBI. The company plans to float their IPO in the market after getting the approval of SEBI. The company plans to raise funds of Rs.800 Crore through the IPO. The IPO includes fresh equity worth Rs.350 Crore and an OFS worth 10,767,664 equity shares. The promoters and the selling stakeholders bring forward the OFS. The company also stated in its DRHP  that it would carry out a pre-IPO placement offer of Rs. 50 Crores inclusive of the IPO Issue Size.

The OFS of the company will include 1.53 Crore CCPS, also known as Compulsory Convertible Preference Shares. Out of these CCPS mentioned in the DRHP, 91.51 lakh shares will be converted into fully paid-up equity shares. The company also stated that the funds been raised from the IPO would be used as follows:

For the Repayment of the Debt Rs.155 Crore
Working Capital Expenditure Increment Rs.110.76 Crore
IPO Opening Date 
IPO Closing Date 
Issue TypeBook Building Type
Face ValueRs.5 / Equity Share
IPO Price 
Market Lot 
Min Order Quantity 
Listing AtBSE, NSE
Issue SizeRs. 800 Crores
Fresh IssueRs. 350 Crores
Offer for Sale10,767,664 equity shares
Basis of Allotment Date 
Initiation of Refunds 
Credit of Shares to Demat Account 
IPO Listing Date 
Basis of the Allotment Type% Of the IPO Offer
Qualified Institutional Buyer75
Non-Institutional Investor15
Retail10

WEAKNESS AND THREATS OF KEVENTER AGRO IPO:

  • The company is vulnerable to the threat of an Inadequate and Interrupted raw materials supply. 
  • The company will also be highly affected due to the fluctuation of the prices and seasonality of the raw material used in their business operation.
  • The company is also suffering due to consumer spending changes, adapting to consumers’ preferences and changes in consumer patterns during the COVID-19.
  • The company has also incurred a dramatic decline in their business operation due to the COVID-19 impact.
  • The company had registered a restated loss in the past, and it wasn’t mentioned in their books before any taxation. As a result, the company is under investigation by The Directorate of Enforcement.
  • The company is also under investigation due to a dispute for the public interest. It is in connection with the acquisition done by the West Bengal Government. The Government acquired equity shares of MDL, a former subsidiary of the company.
  • The company promoters, along with the directors, are subject to a trial under a legal procedure. Any negative news from there could have an impact on the business operations of the company.
  • The company need to make sure that their marketing, advertisement and growth plan strategy are properly executed.
  • The company also needs to manage its distribution system and network; any disruption in its supply chain demand could negatively affect its business.
  • The company has only moderate capacity utilization that led to a very modest gearing ratio and capital structure.
  • The company also faces intense competition. The competition is from both large organized and small unorganized players.
  • The company is engaged in a highly capital-intensive business. It is due to the company’s low net asset turnover ratio. The ratio was around two times. These companies are highly vulnerable to underperformance if the company does not have a stable and strong cash flow.
  • The company also has high debt. The Debt-to-Equity Ratio of the company is at 4.4 times.
  • The company has a high dependence on the business operation with Parle Agro. Any deal misunderstanding can hamper the business operation of the company.

STRENGTHS AND GROWTH ASPECTS OF KEVENTER AGRO IPO:

  • The company has a very diversified revenue profile as it is engaged in multiple business setups.
  • The company also has an established and high market position in the dairy segment and beverage sector. 
  • The company also reported a stable performance upfront in terms of financial parameters and operating parameters in FY20. 
  • The company also completed their much-awaited CAPEX Plan. The CAPEX involves an expansion in manufacturing the new fruit juice lines for Frooti and Appy Fiz.
  • The company generates 40% of their total income from their Dairy segment. Another 34% of their total revenue is generated from the beverage segment.
  • The company also registered a growth in the scale of its business operations.
  • The company has strong marketing and a distribution network system. The network comprises 700 distributors, 35 super distributors and 110,000 retailers.
  • The company is the major company with a huge market share in Eastern and North-Eastern India.
  • The company has a diversified product portfolio along with a large, highly satisfied client base.
  • The company has solid multi-Channel technology, a distribution platform and a network that provides them efficiency in distribution.
  • The company has a good vision of their marketing strategy and high brand awareness of its business operations.
  • The company has a reputation for bringing on new products according to customer needs and trending patterns in society.
  • The company has an excellent production and manufacturing facility.
  • The company operates on high-quality control and safety standards.
  • The company has a well experienced and highly skilled management team and a board of directors and promoters.
  • The company have received ISO Quality standard Certification for their Manufacturing facilities. 
  • The company has a strong association with many reputed firms it includes:
Parle AgroFrooti, Appy, and Bailley
Tata HousingReal Estate
ITCNoodle Manufacturing
GFACoffee World and Cream & Fudge

PROMOTERS:

The promoters of the company are as:

  • Mayank Jalan
  • Keventer Global Private Limited
  • MKJ Developers Limited
  • Edward Keventer Private Limited
  • Keventer Capital Limited
  • Sarvesh Housing Projects Private Limited
  • Speedage Trade Limited
Pre-Issue Share Holding93.84
Post Issue Share Holding
 
ParticularsFor the year with amount in Crore
31-Mar-2131-Mar-2031-Mar-19
Total Assets722.92729.11669.65
Total Revenue836.03958.25884.41
Profit After Tax-76.183.42-0.12
PARAMETERMARCH 21MARCH 20YoY %
   Core EBITDA Margin (%)6.433.8168.65
   EBIT Margin (%)3.743.526.44
   Pre-Tax Margin (%)0.88-0.70224.73
   PAT Margin (%)-0.01-1.1599.17
   Cash Profit Margin (%)2.140.97121.42
   ROA (%)-0.01-1.2499.02
   ROE (%)-0.04-3.7298.89
   ROCE (%)5.704.9315.60
   Asset Turnover(x)1.271.0718.20
   Sales/Fixed Asset(x)1.801.772.08
   Working Capital/Sales(x)13.5813.401.30
   Fixed Capital/Sales(x)0.550.57-2.04
   Receivable days25.5039.28-35.09
   Inventory Days44.1861.23-27.84
   Payable days32.7035.94-9.02
   Net Sales Growth (%)14.71-3.79488.02
   Core EBITDA Growth (%)36.69-43.30184.73
   EBIT Growth (%)21.80-55.64139.18
   PAT Growth (%)99.06-160.25161.81
   EPS Growth (%)98.92-146.73167.42

CONTACT DETAILS:

Keventer Agro Limited
34/1 D.H. Road, Kolkata 700 027,
West Bengal, India
Tel: +91 33 3503 6200
Email: cs@keventer.com
Website: www.keventer.com

REGISTRAR:

Link Intime India Private Limited
C-101, 1st Floor, 247 Park, L.B. S. Marg
Vikhroli (West) Mumbai 400 083
Maharashtra, India
Tel: +91 22 4918 6200
E-mail: keventer.ipo@linkintime.co.in
Website: www.linkintime.co.in

LEAD MANAGER(S) OF KEVENTER AGRO IPO:

  • ICICI Securities Limited
  • JM Financials Limited
  • Axis Capital Limited
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