Vishwaraj Sugar Industries Limited IPO

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(i) They are an integrated sugar and other allied products manufacturing company operating from Belgaum District in the State of Karnataka which is designated as one of the “High Recovery zones” for sugar production by Government of India.

(ii) They operate a single location sugar unit having licensed crushing capacity of 11,000 TCD. In addition to sugar, they also manufacture other allied products like Rectified Spirits, Extra-Neutral Spirits, Indian Made Liquor, Vinegar, Compost, Carbon dioxide (CO2), etc. and are further engaged in the generation of power for captive consumption as well as external sale.

(iii) The business can be broken up into five main segments namely Sugar, Co-Generation, Distillery, Indian Made Liquor (IML) and Vinegar.

(iv) In the year 2001, they commenced operations of manufacture of Distillery products such as Ethanol, Rectified Spirit and Extra Neutral Spirit. In the year 2006, the company implemented backward integration and began commercial operations for Sugar manufacture from sugarcane, along with Co-Generation capabilities. During the year 2008, they began bottling of Indian Made Liquor.

Objects of the Vishwaraj Sugar Industries Limited IPO:

It is a mix of OFS and Fresh issue. The OFS is for the aggregate of up to 70,00,000 Equity Shares and the Fresh Offer is up to 30,00,000 Equity Shares. The objective of the Fresh Issue is: (a) Funding Working Capital Requirement. (b) General corporate purpose Further.

Vishwaraj Sugar Industries Limited IPO Details:

Open Date: Sep 30 2019
Close Date: Oct 04 2019
Total Shares: 10,000,000
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Building
Issue Size: 60 Cr.
Lot Size: 240 Shares
Issue Price: ₹ 55-60 Per Equity Share
Listing At: NSE,BSE
Listing Date: Oct 14 2019

Promoters And Management:

(i) Mr. Umesh Katti, aged 60 years, is the founding Promoter of our Company. He is designated as Chairman & NonExecutive Director on the Board of the company. He has done his Pre-University Course from K. L. E. Society’s Lingaraj College, Belgaum. He has over 16 years of experience in the sugar industry. He has been elected as an M.L.A. of the Karnataka Legislature eight times from Hukkeri. He was a Cabinet Minister in the Government of Karnataka between 1996-1999 holding the portfolio of the Sugar Ministry as well as Public Works. (ii)  Mr. Nikhil Katti, aged 36 years, is a Promoter and the Managing Director of our Company. He holds a Bachelor degree in Business Administration from Karnataka University, Dharwad as well as a degree of Masters in Business Administration (MBA) in International Marketing from the University of Wales. He was serving on the Board of our Company since 2009. Having gained over 8 years experience in the sugar industry

Financials of Vishwaraj Sugar Industries Limited IPO:

1.  There is no growth in revenue in the last 3 years. The revenue in 2015 was 349 cr which has reduced to 307 cr in 2019. 2. In the last 2 years i.e. FY18 and FY19 the company is running in losses. So PAT and EPS both are negative. 3. As of 31.03.2019, the company has a total borrowing of 318 cr and Net-Worth of 211 cr on balance sheet. So the balance sheet looks highly leveraged. The D/E is 1.50.

Comparison With Peers:

The company has shown Ugar Sugar, Dwarkesh Sugar, Balrampur Chini, and Dhampur Sugar as its listed peers that are currently trading at a P/Es of around 0, 5.8, 6.1 and 5.1.

Recommendation on Vishwaraj Sugar Industries Limited IPO:

Review and Recommendation of InvestorZone is: 2/10

Lead Manager of Vishwaraj Sugar Industries Limited IPO:

  1. Aryaman Financial Services Limited

Registrar of Vishwaraj Sugar Industries Limited IPO:

  1. Bigshare Services Private Limited

Bid Details of Vishwaraj Sugar Industries Limited IPO as on
04 Oct 2019 | 05:00:00 PMSr.No.CategoryNo.of shares offered / reservedNo. of shares bid forNo. of times of total meant for the category1Qualified Instituti

No.of shares offered No. of shares bid No. of total times
1,000,000 0 -
4,000,000 7,055,520 1.76
5,000,000 4,416,960 0.88
- - -
- - -
10,000,000 11,472,480 1.15
No.of shares offered No. of shares bid No. of total times
1,000,000 - -
4,000,000 3,527,760 0.88
5,000,000 2,208,480 0.44
- - -
- - -
10,000,000 5,736,240 0.57
No.of shares offered No. of shares bid No. of total times
1,000,000 - -
4,000,000 3,527,760 0.88
5,000,000 2,208,480 0.44
- - -
- - -
10,000,000 5,736,240 0.57

Discussion on Vishwaraj Sugar Industries Limited IPO: