Aquaculture product exporter Apex Frozen Foods’ IPO to open on Aug 22

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Apex Frozen Foods, an integrated producer and exporter of shelf-stable quality aquaculture products is now going public. Its Initial Public Offering (IPO) will open for public subscription on August 22, 2017 and close on August 24, with subscription for Anchor Investors, opening on August 21 2017. The IPO will be of upto 87,00,000 equity shares of face value of Rs 10 each for cash at a premium, offered through a book-building route at a price band ranging between Rs 171 and Rs 175 per equity share, aggregating between Rs 148.77 crore and Rs 152.25 crore. The proceeds from the IPO will be used to finance the company’s expansion programme. The book running lead manager is Karvy Investor. The issue comprises a fresh issue of 72,50,000 equity shares and an offer for sale of 14,50,000 equity shares by the promoter and promoter group members. The shares will be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).  The company’s total revenues grew from Rs 2,554.8 million in fiscal 2013 to Rs 7,096.8 million in fiscal 2017, with a return on net worth of 25.22 per cent in fiscal 2017. It has a sizable farming operation, spread across 1,337.69 acre of land. The net proceeds from the fresh issue will be pumped in to set up a new shrimp processing unit with a proposed capacity of 20,000 metric tonne per annum (MTPA) in Andhra Pradesh’s East Godavari district, as well as for general corporate purposes. The company’s processing facility, which is located in Kakinada, Andhra Pradesh, has a capacity to process over 9,240 MTPA of finished products and an additional pre-processing and processing arrangement at a facility owned by Royale Marine Impex Private Limited, which is located in Bapatla, Andhra Pradesh, and has a capacity to process about 6,000 MTPA. The processing facilities are supplemented by cold storage facilities located in Kakinada and Bapatla. And to further improve the company’s operations, it has its own fleet of vehicles with freezing capabilities. The facility is approved by the Export Inspection Council for export to various developed nations, including the United States, the United Kingdom and various European countries.  The operational facilities are strategically located along the coastal belt of Andhra Pradesh. The facility is approximately 20km from Kakinada port and approximately 150km from Visakhapatnam port, thereby providing a substantial logistical advantage for the transport of the export-ready finished product. Seafood is an important source of nutrition and livelihood for millions of people worldwide. The global seafood consumption is expected to reach 170-175 million tonne by financial year 2021. The global aquaculture market is gaining share over the marine catch industry is expected to increase to 52 per cent share by 2020. The United States is the largest importer of aquaculture products, accounting for nearly 18 per cent of the total imports in 2015. Going forward, demand from that country is expected to keep rising and reach 22 per cent by 2020. India is a leading country in seafood exports and aquaculture production. Its export market grew at a compounded annual growth rate (CAGR) of 10 per cent to $ 4.7 billion between 2010-11 and 2015-16, and is expected to reach $7 billion by 2020-21. Of the total exports from India, the United States is the top-most destination at 28 per cent, and expected to reach 30-32 per cent by 2020-21. Of the total aquaculture production in India, close to 80 per cent is exported, while the rest is sold in the domestic market. Andhra Pradesh is the most favourable state for aquaculture business with the government offering incentives to set up farms, processing units and purchasing feeds. In 2015-2016, the state accounted for between 77 and 79 per cent of the total Pacific white leg shrimp export.

Source: F n B news

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