Mukka Proteins Ltd IPO 

Mukka Proteins Limited is one of the leading companies in India’s fish protein industry. The company has refiled its DRHP with SEBI to raise funds through IPO. Previously, it filed its DRHP in March 2022. However, they postponed their IPO launch and withdrew the papers. The IPO will entirely consist of a fresh issue of up to 8 crore shares. As per multiple reports, the size of this IPO could range between Rs. 175 crore and Rs. 200 crore. Proceeds from the IPO will be utilised for its working capital requirements and part repayment of working capital loans. Let’s learn about the upcoming Mukka Proteins Ltd IPO and take a look at the business and financials of this company.

Also Read: How does an IPO work?

About Company 

Mukka Proteins manufactures fish oil. Fish oil is used for the production of leather tanneries, soap, and in the paint industry. Apart from manufacturing, the company also exports its products to over 10 countries including Bangladesh, Bahrain, China, Chile, Indonesia, Malaysia, Myanmar, Saudi Arabia, Philippines, Oman, South Korea, Taiwan, and Vietnam.

The company has 6 manufacturing facilities. Two of these facilities are owned by its foreign subsidiary in Oman, Ocean Aquatic Proteins LLC. The rest four of them are situated in India. Apart from these, the company owns and operates 3 blending facilities and 5 storage facilities in the country. 

As of March 2022, the Indian fish oil and meal industry generated estimated revenue of Rs. 13,000 to Rs. 17,000 million. For the same duration, the company’s revenue was Rs. 6,928.87 million which is 45% to 50% of the total revenue of the entire industry. 

Company Financials 

The following table lays down some crucial financial information about Mukka Proteins that is of essential knowledge to potential investors. All the information is as per Mukka Proteins Ltd DRHP:

Parameters as Per the Year Ending On	March 31 2021	March 31 2020	March 31 2019
Total Assets	3,547.95	2,931.15	2,008.41
Total Liabilities	2,848.71	2,353.64	1,567.44
Total Expenses	5,983.17	5,373.59	3,921.98
Total Revenue	6,137.73	5,570.90	4,116.90
Profit After Tax	110.10	135.74	136.81
EBITDA	218.80	237.88	226.68
Earnings Per Share (EPS) (Basic and Diluted) *	0.50	0.62	0.62

*Values in Rs. millions except EPS 

Strengths 

Following are some of the driving factors behind Mukka Protein’s growth and success: 

• Mukka Protein was the largest exporter of fish oil and meal from India in FY20. The company has received the MPEDA award multiple times for the consecutive financial years of 2017, 2016, 2015, 2014, 2013, and 2012. It was also one of the largest dry marine products exporters. 
• The company deals with products which are popular seafood in the US, Japan, and Europe, such as shrimp. Shrimp export has recorded a CAGR of 17% in terms of value and 13% in terms of volume in the past decade, from 2012 to 2021.
• Another advantage of Mukka Proteins is its long-standing relationship with its customers. The company has been effectively expanding its product portfolio; enhancing product applications, design, packaging, etc. This has helped the company expand their portfolio and broaden its customer base. 
• Mukka Proteins is committed to protecting and improving the environment. Hence, the company adheres to all compliances and regulations related to the environment. It has adopted the HACCP System principles for its processing plants. 

Risk Factors 

Along with the pros, there are some underlying risks involved with investing in Mukka Proteins Ltd. These risks have the potential to hamper the company’s performance. Here are some of them: 

• The company needs certain approvals and licences as well as compliance with certain rules and regulations to continue its business. Failure to obtain such approvals or licences or renewal of the same can fines, penalties or halting of operations.
• As the company operates in an environmentally sensitive industry, its operations are dependent on multiple natural factors such as weather conditions, seasonal changes, etc. This can disrupt its supply chain and that will in turn affect its production and operations. 

Also Read: Risk of investing in IPO

Summary 

The Mangalore-based company has reported a net profit worth Rs. 25.82 crore in FY22. Mukka Proteins has been continuously awarded by the Marine Products Export Development Authority (MPEDA) for its export operations. Being one of the largest producers of fish meal and fish oils, it can capitalise on the growing demand for seafood globally. These factors make the Mukka Proteins Ltd IPO worth keeping an eye out for.

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