Aelea Commodities Limited IPO

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The company specializes in the importation and trading of Raw Cashew Nuts (RCN) and Cashew Kernels. They source RCN from various African countries, including Benin, Tanzania, Burkina Faso, Senegal, and Cote d’Ivoire, requiring significant quantities and thereby tying up substantial working capital funds. Additionally, they trade by-products from sugar mills, such as Bagasse.

Domestic and Global Market Presence

They supply their products both domestically and internationally. Domestically, their major customers are situated in Rajasthan, Karnataka, Gujarat, Mumbai, and other regions. Globally, they have a significant customer base in Dubai and Sri Lanka.

Value Addition and Diversification

Traditionally, Raw Cashew Nut has been processed to obtain edible cashew kernels, which constitute less than 25% by weight of the Raw Cashew Nut. Their long-term focus is on extracting better value from the value-added products of the Cashew Nut Shell. They plan to start processing the Cashew Nut Shell into Cashew Nut Shell Liquid (CNSL) in a phased manner. CNSL holds immense potential across various industries, including automotive, pharmaceuticals, and chemicals, due to its versatile applications such as in brake linings, varnishes, and insecticides.

This diversification not only adds a new revenue stream but also reinforces their commitment to sustainability by minimizing waste and maximizing resource utilization. Their expansion and diversification strategy positions them to solidify their leadership in the cashew processing industry while unlocking new avenues for growth and innovation.

Future Prospects

In the upcoming period, they are poised to transform Cashew Nut Shell Liquid (CNSL) into Cardanol (distilled CNSL) and Residol. Building upon extensive research and development efforts, they are prepared to meet the rising global demand for sustainable and green fuels by offering CNSL-derived products. Additionally, they are well-positioned to initiate a project for the production of high-calorific-value Bio Charcoal from the residual Cashew Nut Shell Mass post-CNSL extraction. This Bio Charcoal holds potential for further processing into Activated Carbon, aligning with their commitment to innovation and environmental sustainability.

By implementing these strategic initiatives, they aim to significantly enhance their output of high-quality cashew kernels and further process the Cashew Nut Shell into valuable products, thereby maximizing efficiency and meeting growing market demands.

Objects of the Aelea Commodities Limited IPO:

The company proposes to use the Net Proceeds from the Issue to fund the following objects: i. Setting up a new manufacturing unit and installing Plant and machinery thereon; ii. Purchasing Plant and Machinery at an existing manufacturing unit; iii. General Corporate Purposes.
DRHP of Aelea Commodities Limited IPO
RHP of Aelea Commodities Limited IPO

Aelea Commodities Limited IPO Details:

Open Date: Jul 12 2024
Close Date: Jul 16 2024
Total Shares: 5,368,800
Face Value: ₹ 10 Per Equity Share
Issue Size: 51.00 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 91 - 95 Per Equity Share
Listing At: BSE SME
Listing Date: Jul 22 2024

Promoters And Management:

Hozefa S. Jawadwala, 43, is the Chairman and Managing Director of the company. He holds a Bachelor of Commerce from the University of Mumbai (2003), is a Chartered Accountant, and a Certified Financial Risk Manager from GARP (USA). A promoter of the company, he became a director on December 1, 2020, and assumed his current role on January 30, 2024. With extensive experience in financial management, treasury, mergers and acquisitions, fund-raising, and multi-cultural team management, he has over a decade of experience in the agri-based industry. He oversees business operations, focusing on expansion, customer acquisition, and supplier negotiations. Ashok Patel, 47, is the Whole Time Director and CFO of the company. A Chartered Accountant from the Institute of Chartered Accountants of India, he is also a promoter and founder. Appointed as a director on November 5, 2018, he became Whole Time Director on January 30, 2024. With extensive experience in finance, credit, and project funding, he has managed business operations, profit centers, financial and operational control, and business expansion. In the company, he oversees banking relations, finance management, accounts, branch operations, and vendor management. Firoz Gulamhusein Hathiyari, 59, has been a promoter and director of the company since its incorporation on November 5, 2018, and became a Non-Executive Director on April 1, 2023. A Chartered Accountant from the Institute of Chartered Accountants of India, he is a renowned practicing CA in Mumbai. He has extensive experience in assurance practices for companies in gas distribution, HR practices, and international merchant trading. Known for his expertise in Indian tax laws and compliance for the MSE and SME sectors, he has over two decades of experience managing outsourced accounting functions. He brings energy, vision, and a strategic plan to drive the company's exponential growth.

Financials of Aelea Commodities Limited IPO:

Particulars ( In Lakhs )
2022
2023
2024
2M-FY25
Revenue from Operations 10,276 10,895 14,237 2,756
Other Income 275 120 214 3
Total Revenue 10,551 11,014 14,451 2,758
Cost of Material Consumed 1,725 6,099 5,323 836
Purchases of Stock-in-Trade 5,753 4,246 5,808 1,199
Change in Inventories 901 -1,855 -685 103
Employees Benefit Expenses 238 227 244 42
Other Expenses 802 1,657 1,700 195
EBITDA 1,131 640 2,060 383
OPM (%) 10.72% 5.81% 14.26% 13.90%
Depreciation & Amortisation 22 41 153 30
EBIT 1,109 599 1,907 354
Finance Cost 134 302 451 58
PBT 975 297 1456 295
Tax -89 106 233 15
PAT 1063 191 1222 280
NPM (%) 10.08% 1.74% 8.46% 10.16%
No.of Shares 203.68 203.68 203.68 203.68
EPS 5.21 0.93 6.00 1.37

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Aelea Commodities Limited 142 12 6.00 15.8 95 194
Krishival Food Limited 103 10 4.31 52.9 228 508
Prospect Commodities Limited 24 2 4.23 39.3 166 68
* All the data is as per FY24.

Recommendation on Aelea Commodities Limited IPO:

1. Aelea Commodities Limited is specialize in the comprehensive processing and trading of cashews, catering to both Business-to-Business (B2B) and Business-to-Consumer (B2C) markets. Their focus on high-quality cashew products allows them to serve a diverse clientele domestically and internationally. Additionally, their company trades in various other commodities, including sugar, pulses, soybean, rice, and wheat flour, exclusively through the B2B channel. 2. Cashew Processing and Trading Their cashew processing unit in Surat operates with a robust capacity of 40 metric tons per day. We import raw cashew nuts (RCN) from several African nations, including Benin, Tanzania, Burkina Faso, Senegal, and Côte d’Ivoire. Additionally, we trade by-products from sugar mills, such as bagasse. Their operations are divided into two models: i. B2B Model: Serving wholesale clients with bulk quantities of processed cashews and other commodities. ii. B2C Model: Catering to individual consumers with premium cashew products. 3. Subsidiary Their company has one subsidiary, Supreme Commodities DMCC, located in Dubai. This subsidiary enhances their international trading capabilities and market reach. 4. Their major domestic customers are located in Rajasthan, Karnataka, Gujarat, and Mumbai, while their international clients are primarily based in Dubai and Sri Lanka. 5. Competitive Landscape Their company operates in a competitive environment with numerous organized and unorganized players at both national and international levels. 6. The Revenue has Increased from Rs.102 Crores in FY22 to Rs.142 Crores in FY24. 7. The EBITDA has Increased from 11 Crores in FY22 to 20 Crores in FY24. 8. The PAT has Increased from 10 Crores in FY22 to 12 Crores in FY24. 9. As per FY24, CFO/EBITDA is 1.00, and EPS is 6.00, 10. Market Capitalization is 194 Crores and P/E is 15.8x based on FY24.

Lead Manager of Aelea Commodities Limited IPO:

  1. EKADRISHT CAPITAL PRIVATE LIMITED

Registrar of Aelea Commodities Limited IPO:

  1. Maashitla Securities Pvt. Limited

Company Address:

Aelea Commodities Limited 401 & 402, Saifee Park-2 Dr. Mascarenhas Road, Mazgaon, Mumbai 400 010 Phone: +91- 22 6634 09891 Email: info@aeleacommodities.com Website: https://www.aeleacommodities.com/

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