Consistently being awarded by MPEDA, during the last 7 (seven) years for the export performance, inter alia, including as an outstanding performance in export of fish meal, fish oil and allied products for Fiscal 2021, Fiscal 2020 and Fiscal 2019. Mukka Proteins Limited believe that they are one of the key players of the Fish Protein industry in India. In Fiscal 2023, of the total estimated revenue of the Indian fish meal and fish oil industry of Rs 32,000 million to Rs 41,000 million, the revenue of the Company was Rs 10,663.98 million thus, being 25%-30% contributor to the estimated revenue of the Indian fish meal and fish oil industry for the corresponding period. The Company is also amongst the first few Indian companies to have commercialised insect meal and insect oil (collectively 'Insect Protein') as an ingredient for aqua feed, animal feed and pet food. Fish Protein and Insect Protein are hereinafter, collectively, referred to as 'Animal Protein'. As a manufacturer of Fish Protein products, they manufacture and supply fish meal, fish oil and fish soluble paste which is an essential ingredient in the manufacturing of aqua feed (for fish and shrimp), poultry feed (for broiler and layer) and pet food (dog and cat food). Further, fish oil also finds its application in pharmaceutical products (additionally, Omega-3 pills and related products derived from fish oil are gaining importance as high nutrient and healthy dietary supplements), soap manufacturing, leather tanneries & paint industries. They sell the products domestically and also export them to over 10 countries, including Bahrain, Bangladesh, Chile, Indonesia, Malaysia, Myanmar, Philippines, China, Saudi Arabia, South Korea, Oman, Taiwan and Vietnam. As on the date of this Red Herring Prospectus, they have 6 (six) manufacturing facilities, out of which 4 (four) manufacturing facilities are located in India and 2 (two) manufacturing facilities, held through the Foreign Subsidiary, namely Ocean Aquatic Proteins LLC is located in Oman. Further, the Company operates 3 (three) blending facilities and 5 (five) storage facilities located in India. All the Facilities are strategically located within the close proximity to the coastline. As on September 30, 2023, the total work force is 414 (four hundred and fourteen) which includes skilled and unskilled labour, administrative staff, management and operations team. They maintain the facilities along the coastline to minimize the dependency on any particular coastal landing sites and fish catchments and thus providing with fresh, adequate and cost-effective access to the key raw material i.e. pelagic fish, such as sardine, mackerel, anchovy, etc. The strategically located Facilities also enable them to maintain high product quality and optimize on the transport cost. As on September 30, 2023 the annualised aggregate manufacturing capacity is 115050 MTPA of fish meal, 16950 MTPA of fish oil and 20340 MTPA of fish soluble paste. As on September 30, 2023, they have also entered into contractual arrangement with third party manufacturing units, situated at Sasihithlu (Karnataka), Udupi (Karnataka), Ullal (Karnataka), Taloja (Maharashtra), Porbandar (Gujarat) and Mangrol (Gujarat), for supply of fish meal and fish oil. The third-party manufacturing units at Udupi (Karnataka) and Ullal (Karnataka) are on job work basis where the raw fish are supplied by the Company and are converted into fish meal and fish oil. These third-party manufacturing units are close to the source of the key raw material. i.e., pelagic fish, thus increasing the presence across the western coastline of India. The Company continuously seeks to identify new manufacturing units, on job work basis or similar arrangements, to achieve operational efficiency and also to have access to the key raw material, i.e., pelagic fish. As per financial performance, Mukka Proteins Limited has posted total income / net profits of Rs 609.95 Cr / Rs 11.01 Cr (FY21), Rs 776.15 Cr / Rs 25.81 Cr (FY22), Rs 1,183.80 Cr / Rs 47.52 Cr (FY23) and Rs 612.88 Cr / Rs 32.98 Cr (Q2 FY24). So as per previous financials data, company has shown growth, but decline in net-profit in FY23. Company has an average EPS of Rs 1.44 and average RoNW of 28.66% for last three fiscals. Issue is priced at a P/BV of 3.87 as per NAV of 7.23 as on 30.09.23. If we attribute latest earnings of FY22, FY23 and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around 32.53, 17.67 and 12.73 respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. Fedex Securities Private Limited : This is 1st Main Board IPO from this BRLM and handled 24 SME IPO in last 3 years. From last 11 SME IPOs, two opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 11 SME IPOs, four are trading below issue price and remaining are trading above issue price.( As on 27.02.2024 ) As per financials, Mukka Proteins Limited has shown good growth, RoNW is 34.19% and P/E is respectively 32.53, 17.67 and 12.73 as per FY22, FY23 and annualised FY24 earnings. So, issue looks fully priced. Company is in business of Animal Protein (aqua feed, animal feed and pet feed), which is highly competitive and fragmented business segment. Companies from the business segment is not known for wealth generation and some investors avoid such companies due to sea food business. So, we give "SUBSCRIBE FOR LISTING GAINS" rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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