Uma Exports Ltd IPO - 7 things to know

Uma Exports Ltd, engaged in the business of exporting building material like granite, marbles and marble chips, had filed its draft red herring prospectus (DRHP) in late July 2021 and SEBI has just given its observations and approval for the IPO in February 2022.

Normally, the IPOs are approved by SEBI within a period of 2 to 3 months unless there are other queries or clarifications that the regulator has.

The IPO of Uma Exports Ltd will be a combination of a fresh issue and an offer for sale and the next steps in the IPO process will be commenced once the dates and the indicative IPO price band is finalized. However, for now it looks like it would only happen in the next fiscal year.

7 interesting facts to know about the Uma Exports IPO

1) Uma Exports Ltd had filed for an IPO with SEBI which comprises of a fresh issue of Rs.36 crore and an offer for sale (OFS) of 146.90 lakh shares. However, since the price band for the proposed IPO has not been announced still, the size of the fresh issue / IPO / offer for sale is not precisely know.

These would be clear only after the price band is announced and that would most likely happen after the LIC IPO only.

2) Let us talk about the offer for sale (OFS) portion of the Uma Exports IPO first. A total of 146.90 lakh shares will be sold by the promoters and some of the early investors in the company as part of the offer for sale (OFS).
The OFS component will not result in any fresh fund infusion or dilution of the capital or the EPS.

However, the sale of stake by the promoter will increase the free float of the company and facilitate listing of the stock. It would also reduce the promoter holding in the stock and enhance the public holding.

3) The fresh issue portion of Rs.36 crore will result in the fresh infusion of funds into the company and also the dilution of the capital base as well as the dilution of the EPS of the company due to a larger capital base.

The fresh issue component will also reduce the overall promoter holding in the company due to expansion of the base. The fresh issue size is quite small and the company plans to use the entire fresh funds for the purpose of working capital needs and general corporate expenses.
 

4) Uma Exports actually started off its business engaging in the export of building materials i.e., marble, granite, marble chips and other construction materials. Their largest market was Bangladesh. However, since 1997, the company has substantially expanded its export franchise.

For instance, now its export portfolio includes the export of agricultural produce and commodities such as sugar, spices like dry red chillies, turmeric, coriander, cumin seeds, food grains like rice, wheat, corn, sorghum and tea, pulses and soyabean meal and rice bran de-oiled cake.

The company, as a trader, also imports lentils, fava beans, black urad dal and tur dal in India in fairly large quantities. 

5) The key imports of the company come from Canada, Australia and Burma. It is in the process of exploring opportunities in Malaysia and Sri Lanka; apart from its existing franchise in Bangladesh.

Uma Exports has emerged as one of the biggest B2B (business to business) traders with in-depth specialization in sugar, corn and dal.

It has also set up warehouses to maintain stocks and distribute to different institutional customers like manufacturers and exporters.

The company has now also established a trading presence in the United Arab Emirates to cater to the lucrative Middle East market. Its relationship with UAE is more in the specific commodities like sugar, spices & textile.

6) Uma Exports brings to the table some key strengths like expertise in trading agri commodities, proven projection implementation track record, consistent profitability in operations and an experienced and respected management team. 

7) The IPO of Uma Exports Ltd will be lead managed by Corporate Capital Ventures Private Limited. They will act as the sole book running lead managers or BRLMs to the issue. MAS Services Limited will be the registrars to the IPO of Uma Exports.

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