TGIF Agribusiness Limited IPO

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The business began as “Arvee Farm Products”, a partnership firm founded by Niraj Chhaganraj Gemawat and Rachna Gemawat on February 28, 2014. The firm evolved through different stages, from a partnership to “ARV Farmpro LLP”, and then to the current “TGIF Agribusiness LLP”, indicating a progression towards a more structured corporate entity.

The company is engaged in horticulture, specifically open farming. The operations are based in Pindwara, Sirohi, Rajasthan, covering 110 acres of leased land across three villages: Ajari, Kasindra, and Kojra. The primary focus is on pomegranate farming, which constitutes over 95% of revenue. Secondary crops include dragon fruits, Sagwan trees, lemons, watermelons, and chillies.

Farming Practices and Quality Control

Farming Techniques: Employ various specialized farming practices like fruit thinning and leaf vegetative growth to enhance crop quality.
Quality and Safety Standards: Adherence to rigorous standards in plant quality, nutrient use, and pest control to ensure food safety and crop quality.
Irrigation and Post-harvest Handling: Utilizes drip irrigation for efficient water management and has developed facilities to maintain hygiene and prevent contamination post-harvest.

Market and Sales Strategy

Current Market: Sells primarily to retailers, wholesalers, retail chain stores, hypermarkets, and mandis through a B2B model.
Future Plans: Intends to expand to a B2C model with the “Direct2home” service, aiming to deliver produce directly from farm to consumer homes.

Strategic Position and Outlook

The company’s extensive experience, strategic use of land, and adaptive sales approaches position it well for future growth. The shift towards direct consumer sales is particularly notable as it reflects a strategic response to increasing consumer interest and market demand for farm-fresh produce.

This overview not only highlights the company’s operational and strategic bases but also underscores its adaptive growth strategy and commitment to quality, which are crucial for its ongoing success in the competitive agribusiness sector.

Objects of the TGIF Agribusiness Limited IPO:

The company intends to utilize the proceeds of the Issue to meet the following objects: i. Purchase of agricultural equipment & irrigation system; ii. To meet Working Capital requirements, and iii. General Corporate Purpose.
DRHP of TGIF Agribusiness Limited IPO
RHP of TGIF Agribusiness Limited IPO

TGIF Agribusiness Limited IPO Details:

Open Date: May 08 2024
Close Date: May 10 2024
Total Shares: 687,600
Face Value: ₹ 10 Per Equity Share
Issue Size: 6.39 Cr.
Lot Size: 1200 Shares
Issue Price: ₹ 93 Per Equity Share
Listing At: BSE SME
Listing Date: May 15 2024

Promoters And Management:

Bharat Bhupendrakumar Thaker is the Managing Director of the Company. He has been associated with the Company since its incorporation. He holds a Bachelor’s degree in Commerce from Gujarat University. He is having experience of 25 years of extensive experience in Business Operations Management, Accounting, Administration, Strategic Analytics and overall Management and is responsible for the overall management of the Company. Further, he has an experience of around 9 years in the business of farming and agricultural industry. Niraj Chhaganraj Gemawat is the Chairman of the Company. He is also the Promoter of the Company and has been associated with the Company since its incorporation. He has completed a Post Graduation in Management (MBA) from Symbosis Centre for management and human resource Development Pune and Bachelor in Engineering (B.E) from Gujarat University. He has a work experience of 26 years in the field of business development and management of finance functions, including as one of the Designated partners of the erstwhile Limited Liability partnership firm under the name ‘M/s.’ TGIF Agribusiness LLP (now converted into the Company) and is responsible for the overall management, finance and internal controls systems of the Company. Further, he has an experience of around 9 years in the business of farming and agricultural industry. Indrajeet Anath Mitra the Non-Executive Director of the Company. He has been on the Board W.e.f December 27, 2023. He has completed his Master Of Computer Application from Gujarat University and Bachelor Of Science (B.Sc.) . He has an experience of 23 years in the business mainly specializing in developing software for networking monitoring probes, protocol stacks, embedded systems, business application development.

Financials of TGIF Agribusiness Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
8M-FY24
Revenue from Operations 179 203 230 171
Other Income 3 5 3 1
Total Revenue 182 207 232 172
Cost of Material Consumed 50 24 44 23
Employees Benefit Expenses 44 25 23 39
Other Expenses 35 30 26 22
EBITDA 53 128 140 87
Depreciation & Amortisation 14 11 9 6
Finance Cost 0.1 0.1 0.1 0.2
EBIT 39 117 131 82
OPM (%) 29.08% 61.56% 60.07% 50.88%
PBT 39 117 131 82
Tax 0.7 1.4 0.4 0.2
PAT 38 115 130 81
NPM (%) 21.03% 55.75% 56.00% 47.39%
No.of Shares 25.87 25.87 25.87 25.87
EPS 1.47 4.46 5.02 3.14

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
TGIF Agribusiness Limited 2 1 5.02 18.5 93 24
Raghuvansh Agrofarms Limited 11 6 5.00 38.0 200 239
Bangalore Fort Farms Limited 24 0 0.35 121.0 60.6 29
* All the data is as per FY23.

Recommendation on TGIF Agribusiness Limited IPO:

Review and Recommendation of TGIF Agribusiness by team IZ is 3/10. 1. TGIF Agribusiness is primarily a horticulture company engaged in the cultivation of fruits and vegetables. The company emerged from its predecessor, "TGIF Agribusiness LLP'' (previously "ARV Farmpro LLP"), which originated from a partnership firm called "Arvee Farm Products." 2. Core Business Operations Primary Focus on Pomegranates: Their primary crop, pomegranate, constitutes over 95% of our total revenue. Their farmland covers over 110 acres across Ajari, Kasindra, and Kojra villages in Sirohi, Rajasthan. Additional Crops: Besides pomegranates, they also cultivate dragon fruits and Sagwan trees. In recent years, their diversified crops have included lemon, watermelon, and chili. Farming Practices: They employ various techniques to ensure high-quality produce, including: i.  Fruit Thinning                                      ii. Leaf Vegetative Growth Management iii. Soil Moisture Measurement            iv. Drip Irrigation 3. Market and Sales Strategy B2B Sales: They predominantly sell their produce to wholesalers, retail chain stores, hypermarkets, and mandis. Customers assess their farm quality before negotiating prices. Direct2Home B2C Model: Plans are underway to launch a Direct2Home service, enabling local customers to place direct orders for produce, which will be freshly packed and delivered to their homes. 4. Competitive Landscape Fragmented Market: India's agriculture market comprises both organized and unorganized sectors, often operating with variable pricing due to fluctuating demand and supply patterns. Regional Competition: Their company competes with local farmers and other agriculturists across different districts. Differentiating Factors: Their product range and farming practices distinguish them from the competition, providing a competitive edge in the fragmented marketplace. 5. The Revenue has Increased from Rs.1.8 Crores in FY21 to Rs.2.3 Crores in FY23. 6. The EBITDA has Increased from 53 Lakhs in FY21 to 1.4 Crores in FY23. 7. The PAT has Increased from 38 Lakhs in FY21 to 1.3 Crores in FY23. 8. As per FY23, CFO/EBITDA is 0.99, As per FY24, EPS is 4.71, 9. Market Capitalization is 24 Crore & P/E is 19.70x based on FY24.

Lead Manager of TGIF Agribusiness Limited IPO:

  1. Hem Securities Limited

Registrar of TGIF Agribusiness Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

TGIF Agribusiness Limited A/52, Fairy Society, 5th Floor, Corporate House, Bodakdev, Ahmedabad - 380054 Phone: +079 49887770 Email: cs@tgifagribusiness.com Website: http://www.tgifagri.com/

Discussion on TGIF Agribusiness Limited IPO:

2 Comments

    The farm specializes in producing pomegranates, lemons, dragon fruit, watermelon, and chilies. Their revenue is approximately ₹2 crore, but the business is very common. There’s no harm in skipping this IPO.

    Reply

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