KN Agri Resources Limited was established in 1987. It is an agriculture-based company engaged in the business activities of solvent extraction and oil refining. The company also carries out the business operation of trading of various agriculture-commodities. The clients and customers of the company include agriculture-commodities dealers, FMCG Companies, and big houses such as Cargill India, Adani Wilmar Limited, Bunge India, and Ruchi Soya. In addition, the export and trade houses are also the company’s clients. In this article, we take a closer look at the KN Agri IPO Review and its possible future prospects.
The company offers a diversified range of manufactured and processed products. Some of the core products of production of the company are soya de-oiled cake which is also known as soya meal, refined soya oil, degummed oil, hipro Soya Meal, soya crude oil, soya husk, refined rapeseed oil, cottonseed oil, and rapeseed de-oiled cake. In addition, KN Agri Resources Limited also trades various commodities such as soybean, maize, gram, wheat, pulses, sugar, and other household commodities.
KN Agri Resources Limited has three manufacturing plants. These are located in Khandwa and the Itarsi district of Madhya Pradesh. The manufacturing facility of KN Agri Resources Limited has two oil refineries, three solvent extraction plants, and one flour mill. It makes the company self-reliant and a highly diversified company for the production of the commodities. The company has a market share in 15 states of the country. However, the company has a strong presence in Gujarat, Madhya Pradesh, Maharashtra, and West Bengal.
The company’s cumulative capacity for solvent extraction is 3,75,000 TPA, while edible oil has a refining capacity of 60,000 TPA. In addition, KN Agri Resources Limited also holds a flour milling capacity of 24,000 TPA. Along with all these, the company also holds four wind energy power plants with a total capacity of 4.60 MW. It has been present in Madhya Pradesh, Maharashtra, and Rajasthan.
Along with domestic market presence, it also holds export business to the Netherlands, Nepal, Singapore, and Bangladesh. The company promotes its product with refined oil under brands named “CLASSIC” and “KHAN-PAN.” It also has four wind energy power plants of a combined capacity of in the state of 4.68 MW.
OBJECTS OF THE IPO ISSUE:
- Prepayment of all the company’s loans, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
- The company also intends to fund various investments and strategic acquisitions.
KN AGRI IPO DETAILS:
KN Agri Resources Limited recently got approval from SEBI, the market regulator, to float their IPO. The KN Agri Resources have brought forward the IPO is of SME category of 6,584,000 equity shares of the company. The IPO issue size is Rs. 49.38 Crores with a price band of Rs.71 – Rs.75 per equity share. The company has set the market lot size is 1600 equity shares. The company stock will be listed on the NSE- SME platform. Check Day by Day IPO Subscription Details (Live Status)
The company also stated that it would utilize around Rs from the proceeds of the IPO. 40.0 crores for general corporate purposes and to meet the working capital requirements.
| IPO Opening Date | March 15, 2022 |
| IPO Closing Date | March 17, 2022 |
| Issue Type | Book Building type Issue IPO |
| Face Value | Rs. 10 per equity share |
| IPO Price | Rs.71 – Rs.75 per equity share |
| Market Lot | One lot of 1600 Shares |
| Minimum Order Quantity | 1600 equity shares |
| Maximum Order Quantity | 1600 equity shares |
| Maximum Order Price | Rs.120,000 |
| Minimum Order Price | Rs.120,000 |
| Listing At | NSE – SME platform |
| Issue Size | 6,584,000 equity Shares of the company, which corresponds to Rs.49.38 Crores |
| Fresh Issue | 6,584,000 equity Shares of the company, which corresponds to Rs.49.38 Crores |
| QIB Shares Offered | Not more than 50% |
| Retail Shares Offered | No less than 35% |
| NII (HNI) Shares Offered | No less than 15% |
| Basis of Allotment Date | March 23, 2022 |
| Initiation of Refunds | March 24, 2022 |
| The Credit of Shares to Demat Account | March 25, 2022 |
| IPO Listing Date | March 28, 2022 |
COMPETITIVE STRENGTHS OF KN AGRI RESOURCES LIMITED IPO
- KN Agri Resources Limited has a diversified and wide product range. It also caters to service in various segments in the FMCG category.
- The company has strong operation management and its production facility certified by ISO for quality product standards.
- The company also holds and is in the expansion of its huge in-house production capacity.
- KN Agri Resources Limited hugely benefits from the strategic location of its manufacturing units.
- The IPO offer of the company is highly lucrative and backed by a strong track record of the company.
- Presence at the International level with the company’s focus to enhance their exports.
- KN Agri Resources Limited also has multiple businesses in it. It operates wind powerplant, flour milling, oil refining, and marketing the finished goods under its brand.
- It is a group company of the KN Group that is the largest exporter of molasses and holds a presence in the Rice and Sugar Industry.
- The company also recently acquired a majority stake in the ethanol manufacturing unit of capacity 1,00,000 liters per day. The company has also fixed its plans to increase its capacity to 1,60,000 liters per day and set up an integrated sugarcane processing facility.
- KN Agri Resources Limited also targets to set up a grain-based ethanol plant in the Chhattisgarh region by 2024.
FINANCIAL TRENDS:
| Particulars | For the year ending with the amount in lakhs | ||||
| 30-Sep-21 | 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | ||
| Total Assets | 20,189.43 | 19,255.07 | 14,835.30 | 19,466.14 | |
| Total Revenue | 59,467.46 | 130,119.34 | 85,319.66 | 129,246.84 | |
| Profit After Tax | 1,683.92 | 2,618.93 | 1,320.67 | 2,140.47 |
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Earnings Per Share (Rs) | 14.22 | 10685.90 | -99.87 |
| CEPS (Rs) | 16.47 | 0.00 | 0.00 |
| DPS (Rs) | 0.00 | 0.00 | 0.00 |
| Book NAV/Share (Rs) | 86.16 | 107085.28 | -99.92 |
| Tax Rate (%) | 25.25 | 25.80 | -2.13 |
| Core EBITDA Margin (%) | 3.21 | 2.89 | 11.12 |
| EBIT Margin (%) | 3.06 | 2.76 | 10.73 |
| Pre-Tax Margin (%) | 2.70 | 2.09 | 28.81 |
| PAT Margin (%) | 2.02 | 1.55 | 29.77 |
| Cash Profit Margin (%) | 2.34 | 2.05 | 13.88 |
| ROA (%) | 15.36 | 7.70 | 99.53 |
| ROE (%) | 18.00 | 10.50 | 71.37 |
| ROCE (%) | 24.46 | 14.54 | 68.27 |
| Asset Turnover (x) | 7.62 | 4.96 | 53.76 |
| Sales/Fixed Asset (x) | 12.98 | 8.58 | 51.25 |
| Working Capital/Sales (x) | 10.68 | 9.42 | 13.42 |
| Fixed Capital/Sales (x) | 0.08 | 0.12 | -33.88 |
| Receivable days | 5.47 | 16.04 | -65.89 |
| Inventory Days | 21.47 | 26.70 | -19.58 |
| Payable days | 1.00 | 2.00 | -49.79 |
| EV/Net Sales (x) | 0.02 | 0.01 | 148.88 |
| EV/Core EBITDA (x) | 0.68 | 0.28 | 139.91 |
| EV/EBIT (x) | 0.75 | 0.33 | 124.55 |
| EV/CE (x) | 0.15 | 0.05 | 192.76 |
| Net Sales Growth (%) | 52.67 | -33.80 | 255.83 |
| Core EBITDA Growth (%) | 58.38 | -34.59 | 268.79 |
| EBIT Growth (%) | 69.22 | -38.60 | 279.30 |
| PAT Growth (%) | 98.30 | -38.30 | 356.67 |
| EPS Growth (%) | -99.87 | -38.30 | -160.75 |
| Total Debt/Equity (x) | 0.14 | 0.09 | 65.66 |
| Current Ratio (x) | 4.75 | 7.44 | -36.22 |
| Quick Ratio (x) | 2.51 | 1.73 | 45.24 |
| Interest Cover (x) | 8.44 | 4.13 | 104.40 |
The company is currently trading at the valuations of:
- Earnings Per Share (EPS): INR14.22
- Price/Earnings ratio: 4.99
- Return on Net Worth (RONW): 16.51%
- Net Asset Value (NAV): Rs. 86.16 per equity share
- The company issued bonus shares in a ratio of 139:10 in March 2021.
COMPANY PROMOTERS:
The Promoters of the Company are as follows:
- Vijay Shrishrimal
- Sanjay Shrishrimal
- Dhirendra Shrishrimal
- N. Resources Private Limited;
- Anant Trafina Private Limited and
- Anant Counter Trade Private Limited
| Pre-Issue Share Holding | 99.99% |
| Post Issue Share Holding | 73.66% |
COMPARISON WITH LISTED PEERS:
Through the listed peers, it is seen that at the NSE -SME platform, there is no direct competitor of the company through some business space shared by the other companies listed on the NSE
| COMPANY NAME | P/E RATIO |
| Ruchi Soya | 26.83 |
| Gujarat Ambuja Exports | 12.42 |
| Gokul Agro | 15.14 |
| Kriti Nutrients | 23.44 |
COMPANY CONTACT INFORMATION:
KN Agri Resources Limited
KN Building, Subhash Road,
Ramsagarpara, Raipur 492001
Phone:
Email: info@kngroup.in
Website: https://knagri.com/
KN AGRI IPO REGISTRAR:
Link Intime India Private Ltd
Phone: +91-22-4918 6270
Email: knagri.ipo@linkintime.co.in
Website: https://linkintime.co.in/
