HOAC Foods India Limited IPO

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The company under discussion operates in the food production sector, specializing in the manufacture and sale of organic and natural food products. Operating under the brand name “HARIOM,” the business focuses on a range of items including flour (chakki atta), herbs & spices, unpolished pulses, grains, and yellow mustard oil. The products are sold primarily in the Delhi-NCR region through a combination of company-owned and franchisee-owned Exclusive Brand Outlets.

Founded in 2018 by Mr. Rambabu Thakur and Mrs. Gaytri Thakur, the business began with a clear mission to produce high-quality, natural food products devoid of artificial preservatives or synthetic substances. Over time, the leadership expanded to include Yashwant Thakur, who continued the family’s legacy by enhancing the company’s operational expertise and market presence.

The company prides itself on its commitment to quality and freshness. It carefully selects raw materials from various parts of the country and processes these ingredients without artificial preservatives, ensuring the natural qualities of the products are maintained. This approach has allowed HARIOM to cater to a niche segment in the market, establishing a strong customer base in its operational region.

Operational strategy includes an extensive network of 10 Exclusive Brand Outlets, supported by a sales and marketing team of 12 employees as of the end of 2023. The business has also embraced digital avenues for product distribution, with a Direct-to-Consumer (D2C) platform available through a mobile application on both the Google Play Store and Apple’s App Store, as well as through the company’s website.

The company’s supply chain management is a critical aspect of its operation, emphasizing rapid delivery from production to consumer—typically within the same day to a maximum of one day. This swift distribution process is designed to maintain the freshness, taste, and nutritional value of the products, which is a key selling point for their consumer base.

Overall, HARIOM operates with a strong emphasis on quality, customer satisfaction, and innovative distribution strategies, positioning itself well within the competitive food industry in the Delhi-NCR region. The strategic use of franchise outlets and technology solutions like their in-house built mobile application and franchisee management system further strengthens their market position and operational efficiency.

Objects of the HOAC Foods India Limited IPO:

The Company proposes to utilize the funds which are being raised through this Issue towards the following objects: i. Funding the working capital requirements of the company ii. General Corporate Purposes.

HOAC Foods India Limited IPO Details:

Open Date: May 16 2024
Close Date: May 21 2024
Total Shares: 1,155,000
Face Value: ₹ 10 Per Equity Share
Issue Size: 5.54 Cr.
Lot Size: 3000 Shares
Issue Price: ₹ 48 Per Equity Share
Listing At: NSE Emerge
Listing Date: May 24 2024

Promoters And Management:

Mr. Rambabu Thakur, aged 43 years, is the Founder Promoters and Managing Director of the Company. He has been on the Board of Directors of the Company since incorporation. He has been appointed as the Managing Director of the Company for a period of five (5) years with effect from November 02, 2023, till November 01, 2028. He has completed higher secondary education. He is responsible for the overall management of the Company, all aspects of production, ensuring efficiency and adherence to quality standards and plays pivotal role in consistent growth and profitability. Further, he has an experience of more than 5 years in the business of FMCG industry. He holds 16,73,235 Equity Shares, representing 62.25% of the issued, subscribed and paid-up Equity Share Capital of the Company. Mrs. Gaytri Thakur aged 41 years, is one of the Promoter and Executive Director of the Company. She has been on the Board of Directors of the Company since incorporation. She is having more than 5 years of experience in this Industry in ensuring the quality and consistency of both raw and finished spices and proven track record in managing spice recipe formulas to meet and exceed industry standards. She holds 10,14,475 Equity Shares, representing 37.73 % of the issued, subscribed and paid-up Equity Share Capital of the Company. Mr. Yashwant Thakur aged 23 years and Chairman and Non-Executive Director of the Company. He is a pursing Business Administration in Retailing from Shivaji College, Delhi. He is having 1 year experience in FMCG Industry. In the company he is responsible for providing strategic direction to the Company in the competitive FMCG sector, with unique blend of theoretical knowledge and practical experience, he plays active role in marketing and branding and having visionary leader actively involved in the day-to-day operations of the business. His responsibilities extend to overseeing both owned and franchise retail stores, where his strategic acumen and hands-on approach plays a pivotal role in driving growth. He holds 100 Equity Shares, representing 0.004 % of the issued, subscribed and paid-up Equity Share Capital of the Company.

Financials of HOAC Foods India Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
9M-FY24
Revenue from Operations 742 1,087 1,209 1,149
Other Income 4 7 10 6
Total Revenue 746 1,094 1,219 1,155
Cost of material consumed 447 629 605 607
Purchases of Stock in Trade 145 232 281 304
Changes in Inventories -44 -36 -55 -130
Employees Benefit Expenses 55 59 101 95
Other Expenses 99 145 167 140
EBITDA 43 64 120 138
Depreciation & Amortisation 3 6 10 10
Finance Cost 22 20 29 25
EBIT 40 58 110 128
OPM (%) 5.82% 5.82% 9.87% 11.95%
PBT 18 38 82 103
Tax 5 10 23 28
PAT 13 27 59 75
NPM (%) 1.72% 2.50% 4.82% 6.45%
No.of Shares 38.43 38.43 38.43 38.43
EPS 0.33 0.71 1.53 1.93

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
HOAC Foods India Limited 12 0.6 1.53 31.4 48 18
Contil India Limited 20 0.6 2.00 48.9 155 48
Jetmall Spices and Masala Limited 4 0.3 0.48 35.3 17.1 10
* All the data is as per FY23.

Recommendation on HOAC Foods India Limited IPO:

Review and Recommendation of HOAC Foods India by team IZ is 4/10. 1. HARIOM is a Delhi-NCR based company engaged in the manufacturing and retailing of a diverse range of organic food products, including chakki atta (flour), herbs & spices, unpolished pulses, grains, and yellow mustard oil. HARIOM's product portfolio stands out for its commitment to organic and preservative-free food items. 2. Sales and Distribution Model The company operates through an extensive network of Exclusive Brand Outlets, including 4 company-owned and 6 franchisee-owned stores, primarily concentrated in the Delhi-NCR region. Besides physical stores, HARIOM has embraced digital platforms, offering products through a Direct-to-Consumer (D2C) model via their mobile application available on Google Play Store and Apple’s App Store, and through their company website. This integrated sales approach helps maintain a tight supply chain from production to consumer, often delivering products within the same day to ensure freshness. 3. Market Position and Competitive Landscape HARIOM operates in a highly competitive market, characterized by numerous players ranging from large organized to small unorganized entities. The company’s main competitors include prominent names like Gandhi Spices Private Limited, Adani Food Products, and MDH Masala, among others. Competition is based on factors such as product range, quality, brand image, price, delivery, and overall customer experience. Despite the stiff competition, HARIOM distinguishes itself through its focus on organic products and its robust distribution network. 4. Challenges and Opportunities As indicated under the "Risk Factors" in its disclosures, HARIOM acknowledges the competitive pressures that could impact its business. However, its dedication to quality and a strong regional presence coupled with a growing digital footprint provides a solid foundation for sustaining and expanding its market share. 5. The Revenue has Increased from Rs.7 Crores in FY21 to Rs.12 Crores in FY23. 6. The EBITDA has Increased from 43 Lakhs in FY21 to 1 Crore in FY23. 7. The PAT has Increased from 13 Lakhs in FY21 to 59 Lakhs in FY23. 8. As per FY23, CFO/EBITDA is 0.92, As per FY24, EPS is 2.58, 9. Market Capitalization is 18 Crore & P/E is 18.57x based on FY24.

Lead Manager of HOAC Foods India Limited IPO:

  1. GYR CAPITAL ADVISORS PRIVATE LIMITED

Registrar of HOAC Foods India Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

HOAC Foods India Limited D-498, 1st Floor Palam Extension Sector-7 Dwarka, Raj Nagar - II,South West Delhi New Delhi- 110077 Phone: +91 85272 73940 Email: info@attahariom.com Website: https://hoacfoodsindia.com/

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