Seafood processing and exporting company Sandhya Marines Ltd has filed a draft red herring prospectus with the Securities and Exchange Board of India to float an IPO.
The company will issue fresh shares worth Rs 300 crore besides a secondary market sale of 12.6 million shares by promoters K Suryanarayanamma, K Anand Kumar and K Arun Kumar.
The IPO size is estimated at Rs 450-500 crore, a person aware of the matter said, requesting anonymity.
Promoter stake will see a substantial dilution. The share sale will help the firm comply with SEBI’s norms of a minimum 25% public float.
Sandhya will join listed peers Apex Frozen Foods Ltd, Avanti Feeds Ltd, The Waterbase Ltd, and Zeal Aqua Ltd.
Apex Frozen Foods’ IPO was the most recent offering in the sector. The company, which raised Rs 150 crore from the public issue, went public in September 2017. Its shares listed at 20% premium and have since gained 308% from the issue price.
VCCircle reported that Visakhapatnam-based Devi Sea Foods Ltd has hired three domestic merchant bankers to take the company public. It plans to raise as much as Rs 900 crore from the public issue.
Here’s a snapshot of the proposed issue by Sandhya Marines:
Issue
The company will issue fresh shares worth Rs 300 crore. Promoters K Suryanarayanamma, K Anand Kumar and K Arun Kumar will sell 12.6 million shares.
The issue size is estimated at Rs 450-500 crore.
Use of proceeds
The company will use Rs 92 crore from the proceeds to set up a new shrimp facility, besides using Rs 43 crore for setting up new aqua-feed mill facility, Rs 9 crore for new corporate office, Rs 58.98 crore for repayment or advance payment of debt and an undisclosed amount for general corporate purposes.
The proceeds from the secondary sale will go to the promoters. The company will not receive any money from the secondary sale.
Bankers
Karvy Investor Services and SBI Capital Markets are merchant bankers managing the IPO.
Lawyers
J. Sagar Associates is the legal counsel on the IPO.
Company
Sandhya Marines exports a range of frozen seafood products. Its products are marketed to retail chains, stores, restaurants and food service distributors across North America, Europe and Asia.
The company was incorporated in 1987. It caters to more than 100 customers in more than 25 countries, including international seafood distributors and brands such as Arista Industries, Inc, Chicken of the Sea Frozen Foods, Gourmet Fusion Foods Inc and Pacific Coral Seafood Co Inc.
Sandhya Marines has two processing facilities, one each in Palakollu and Vetapalem, located along the coastal belt of Andhra Pradesh with a combined installed processing capacity of 13,200 tonnes per annum as on 31 December 2017.
Financials
Sandhya Marines reported a consolidated net profit of Rs 65.91 crore for nine months ended 31 December 2017 on consolidated revenues (from operations) of Rs 603.20 crore.
The company’s net profit stood at Rs 27.92 crore and Rs 22.15 crore, respectively, in FY2016-17 and FY2015-16.
It reported Rs 522 crore and Rs 349.9 crore in revenues for in FY2016-17 and FY2015-16, respectively.