Hexagon Nutrition Ltd IPO
hexagon has filed preliminary papers with SEBI to raise up to Rs. 600 crore through an initial public offering (IPO) comprising of a fresh issue of e...
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Last Updated: 24 July 2023 5:06 PM by 5Paisa
IPO Synopsis
Hexagon Nutrition Ltd has filed a DRHP with SEBI to raise up to Rs.600 crore. The issue consists of a fresh issue worth Rs.100 crore and an offer for sale of up to 30,113,918 equity shares. Arun Purushottam Kelkar is offloading around 77 lakh shares, 61.36 shares are being offloaded by Subhash Purushottam Kelkar, Anuradha Arun Kelkar is offloading 15 lakh shares, Nutan Subhash Kelkar is offloading around 25 lakh shares and 1.22 crore shares, and 73,668 shares are being offloaded by Somerset Indus Healthcare Fund I Ltd and Mayur Sirdesai respectively.
The book running lead managers to the issue are Equirus Capital Pvt Ltd and SBI Capital Markets Ltd.
Objectives of the issue
1. Rs.33.5 crore is to be used to repay or prepay any debt undertaken by the company or its subsidiaries- HNEPL and HNIPL
2. Rs. 15 crore will be used to fund incremental working capital requirements of the company
3. Rs.19.173 crore will be towards funding of working capital expenditure in order to expand the existing manufacturing facility at Nashik
4. Rs.7.15 crore will be invested in their subsidiary, HNIPL for the financing of capital expenditure requirements at the facility in Thoothukudi
Hexagon Nutrition is a differentiated and research oriented pure-play nutrition company, focusing on holistic nutrition products which contain a wide array of nutritional and nutrition enhancing products. Their product portfolio comprises of fortification of foods, therapeutic nutrition, clinical nutrition, and alleviation of malnutrition. Hexagon started their business in 1993 and have moved up in the industry with their brands “PENTASURE” which caters to adult wellness and clinical nutrition, “OBESIGO” which caters to weight management and “PEDIGOLD” which is used for pediatric nutrition management. The company has a pan-India presence and exports to over 70 countries worldwide such as French Polynesia, France, Malaysia, UAE, Qatar, Russia, Angola, Brazil etc. The products are classified into 3 main segments-
1. Branded nutrition products/ clinical nutrition products (B2C segment)
2. Premix formulations (B2B2C Segment)- premixes manufactured by Hexagon are then supplied to companies like Dabur, Amul, Veeba Food Services, Dukes Consumer care etc
3. Ready to use foods and Micronutrient Powder (ESG Segment)
5. The company has 11 highly experienced and professionally qualified members in their R&D team. Their distribution network is spread across the globe with 25 regional distributors situated in Latin America, Southeast Asia, Africa, and the Middle East. Hexagon has three manufacturing facilities located in Nashik, Chennai and Thoothukudi.
Financials
|
Particulars (In Rs cr) |
Q3 ended 30 September, 2021 |
FY21 |
FY20 |
FY19 |
|
Total Income |
126.92 |
215.43 |
210.83 |
235.90 |
|
PAT |
15.21 |
22.86 |
18.57 |
14.82 |
|
EPS (In Rs) |
1.24 |
1.86 |
1.51 |
1.21 |
|
Particulars (In Rs cr) |
Q3 ended 30 September, 2021 |
FY21 |
FY20 |
FY19 |
|
Total Assets |
228.42 |
213.56 |
202.13 |
191.57 |
|
Total Borrowing |
24.43 |
20.26 |
33.65 |
30.25 |
|
Equity Share Capital |
11.05 |
11.05 |
11.05 |
11.05 |
Key Performance Metrics
|
Particulars (In Rs cr)
|
Q3 ended 30 September, 2021 |
FY21 |
FY20 |
FY19 |
|
Revenue from top 10 customers |
64.58 |
87.27 |
74.76 |
107.12 |
|
EBITDA |
23.4 |
34.4 |
29.66 |
25.73 |
|
EBITDA Margin (%) |
18.73% |
16.38% |
14.55% |
14.16% |
Strengths
1. The company has developed a longstanding relationship with their marquee investors over the last 28 years of their operations. This has led to recurring orders and a stable source of revenue
2. They focus strongly on innovation and have 2 in-house R&D facilities in Chennai and Nashik along with 11 extremely qualified members in their research team
3. Hexagon has a well-established pan-India omnichannel distribution and are present
across various geographies
Risks
1. They are very heavily dependent on the premix formulation segment and also a few customers in that particular segment
2. If there is a sale of any expired product or if defective products are supplied, it will affect the reputation of the company and in turn it will materially affect the cash flows and financials
3. Since the company does not maintain long term relationships with third party suppliers, there might be a short fall in the supply which will have a material effect on the company’s business and financials
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