Hexagon Nutrition Ltd IPO

Last Updated on October 26, 2023 by BFSLTeam BFSLTeam

Hexagon Nutrition Ltd, a Mumbai-based nutrition company known for brands like Pentasure, Pediagold and Obesigo, filed a draft red herring prospectus (DRHP) back in Dec 2021. It received approval from SEBI three months after filling offer documents. The company has proposed to raise Rs. 100 crore fresh issue to fund its working capital requirements and clear certain outstanding loans.

If you are looking forward to leveraging this industry growth, the Hexagon Nutrition IPO may be the right investment option for you. Read below to know more about the same.

About Hexagon Nutrition Ltd

Hexagon Nutrition Ltd is a prominent differentiated pure-play nutrition company offering products across segments like micronutrient premixes, therapeutic products and clinical products. It is a fully integrated company with a core focus on producing holistic nutrition products with a wide range of nutritious products in its portfolio.

Its product portfolio can be classified into three segments: branded/clinical nutrition products in the B2C segment, ready-to-use foods and micronutrient powder in the ESG segment and premix formulations in the B2B2C segment. It has a presence across multiple networks such as hospitals, retail pharmacies, e-commerce platforms, etc.

It has a core focus on continuous innovations in its product line which are made to resolve practical problems like malnutrition, fulfilling daily nutrition requirements, etc. The company has three manufacturing facilities strategically located in Nasik in Maharashtra, Thoothukudi and Chennai in Tamil Nadu.

IPO Details and Objectives

Hexagon Nutrition Ltd has proposed a public issue consisting of an offer-for-sale and a fresh issue.  The net proceeds from the offer-for-sale (i.e. the proceeds after paying out the offer-related costs and taxes) will be received by the seller shareholders. This includes several promoters, a promoter group and other shareholders.

The size of the fresh issue of shares is expected to be Rs. 100 crore approximately; it has the following objectives:

• To repay certain outstanding borrowings made by the company and its two subsidiaries
• To fund its massive working capital requirements
• Fund its capital expenditure in an expansion project
• To make significant investments in one of its subsidiaries “HNIPL”

Also Read: Benefits of Investing in IPO

 Company Financials 

Here are the essential financial details of Hexagon Nutrition Ltd for the financial year 2021, 2020 and 2019.

Particulars	For the Financial Year Ending (Rs. Millions) Except EPS
	March 31, 2021	March 31, 2020	March 31, 2019
Total Assets	2,135.62	2,021.36	1,915.72
Total Liabilities	755.36	854	923.25
Total Expenses	1,861.92	1,864.60	2,161.53
Total Revenue	2,154.35	2,108.26	2,359.02
Profit After Tax	228.61	185.67	148.25
EBITDA	343.99	296.60	257.37
EPS (Basic and Diluted)	2.07 (Basic)1.86 (Diluted)	1.68 (Basic)1.51 (Diluted)	1.34 (Basic)1.21 (Diluted)

Strengths of Hexagon Nutrition Ltd

Here are some notable competitive strengths of Hexagon Nutrition Ltd; knowing the same can help you make an informed decision. 

• Hexagon Nutrition Ltd is a market leader in premix formulation businesses in South Asia. Also, it is a pioneer in the customized premix formulation sector in India.
• It has some of the biggest brands in the clinical nutrition and wellness category catering to various types of consumer requirements. Some of its popular brands include “Pediagold”, “Obesigo” and “Pentasure”.
• The company has developed a well-established relationship of more than 28 years with some of its esteemed clients, resulting in bulk and repeat orders. Some of its marquee clientele includes Amul, Coca-Cola India, Dabur India, Dodla Dairy and more.
• It consistently focuses on innovating its existing products to enhance their life cycle. It has two dedicated research and development facilities situated in Chennai and Nasik.
• It incorporates highly efficient and stringent quality check procedures to ensure that the products are of standardised quality. The manufacturing facilities are equipped with advanced technologies making the manufacturing process efficient and increasing productivity. 

Risks Involved in Hexagon Nutrition Ltd

Every business entity has certain risk factors that are associated with its business activities. Here are some risks associated with the business of Hexagon Nutrition Ltd:

• The company is heavily reliant on the premix formulations market and a major portion of its revenue comes from a few clients in that segment. Therefore, any reduction in demand in this sector can heavily impact its revenue and profitability. 
• Its products have a shelf-life of usually 2 to 3 years. Therefore, the supply of expired products or defective products can directly impact the reputation and goodwill of the company, ultimately reducing its turnover.
• Hexagon Nutrition does not maintain agreement contracts with its raw material suppliers. Hence, if it fails to procure sufficient raw materials, it can result in supply shortages, which would increase the price of its products and lead to revenue loss.

Also Read: Risk of investing in IPO

Summary

To summarise, Hexagon Nutrition Ltd is a prominent differentiating nutrition company in the country. It is preparing to launch its IPO after receiving approval from SEBI. If you are looking forward to this IPO, consider checking its financial performance, line of business, risks and strengths to make an informed decision.

Keep revisiting this website for more updates on the Hexagon Nutrition IPO.

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