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Mukka Proteins IPO: Reel in 7 Key Details Before You Decide

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We’ve all tossed those tiny fish food pellets into aquariums, but have you ever wondered where they come from and who makes them? A fish feed provider like Mukka Proteins. Prepare yourself because one of India’s biggest such companies is diving headfirst into the IPO pool.

Let’s dive in and explore this company’s story and all about Mukka Proteins IPO!

Mukka Proteins Limited IPO Details

Offer Price₹26 – ₹28 per share
Face Value₹1 per share
Opening DateFebruary 29, 2024
Closing DateMarch 4, 2024
Total Issue Size (in Shares)80,000,000
Total Issue Size (in ₹)₹224 Cr
Lot size535 shares
Source: SEBI

1. Business Overview

Mukka Proteins Limited is a prominent player in the Indian animal feed industry, specializing in producing fish meal, fish oil, and fish-soluble paste.  These protein-rich ingredients are widely used in aqua, poultry, and cattle feeds, playing a vital role in animal growth and development. The company sources its raw materials from various locations across India, including Gujarat, Maharashtra, and Andhra Pradesh.

2. Objective of the Issue

The company intends to utilize the net proceeds from the IPO for the following purposes:

  • Working Capital: A significant portion of the funds will be allocated to meet the company’s working capital requirements, ensuring smooth business operations and day-to-day activities.
  • Investment in Ento Proteins: The company plans to invest a portion of the proceeds in its associate company, Ento Proteins, which produces insect-based protein for animal feed. This strategic investment aligns with the growing demand for sustainable and alternative protein sources in the animal feed industry.

3. Financial Performance

Mukka Proteins Limited has witnessed a growth trajectory in its revenue and profitability over the past few years. The company’s revenue has almost doubled from March 2021 to March 2023. Similarly, as measured by net profit margin, its profitability has also improved during the same period.

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Source: Mukka Proteins Results FY22 and FY23

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Source: Mukka Proteins Results FY22 and FY23

4. Competitive Landscape

The Indian animal feed industry is highly competitive, with several established players vying for market share. Some of Mukka Proteins’ key competitors include:

  • Coromandel International Limited
  • Godrej Industries Limited
  • Avanti Feeds Limited
  • Sangam India Limited

Evaluating the competitive landscape is essential to assess Mukka Proteins’ market position and ability to compete effectively.

5. Growth Potential

The Indian animal feed industry is anticipated to witness significant growth in the coming years, driven by rising demand for animal protein, increasing disposable incomes, and expanding aquaculture and poultry sectors. Mukka Proteins, with its established presence and focus on sustainable protein sources, is well-positioned to capitalize on this growth potential.

6. Risks and Challenges

Despite the promising prospects, Mukka Proteins also faces certain challenges that potential investors should consider:

  • Volatility in Raw Material Prices: The company’s business is susceptible to fluctuations in raw materials prices, such as fish, which can impact its profitability.
  • Competition: The intense competition in the animal feed industry can pressure Mukka Proteins’ margins and market share.
  • Regulatory Environment: The company’s operations are subject to various government regulations, and changes in these regulations could impact its business.

7. Management Team

The experience and capabilities of the company’s management team are crucial factors to consider when evaluating an IPO. Investors should carefully assess the management team’s track record, qualifications, and expertise in the animal feed industry.

SWOT Analysis of Mukka Proteins

Established brand and market presence for over two decades in the fish-based feed ingredients market.
Diversified product portfolio offering fish meal, fish oil, and fish soluble paste, catering to various animal feed needs.
Strategic location of proximity to coastal areas facilitates access to raw materials 
Vertically integrated operations offer greater control over the supply chain and potentially improve efficiency.
Experienced management team helps in navigating challenges and guiding future growth.
Dependence on a volatile marine raw material market is susceptible to fluctuations in fish catch, weather conditions, and global economic factors.
Limited geographic reach as it operates primarily in India, potentially hindering its ability to capitalize on growth opportunities in other markets.
The animal feed industry is highly competitive, with established players and potential new entrants vying for market share. 
Growing demand for animal feed with rising disposable incomes, increasing urbanization, and a shift towards protein-rich diets 
Expansion potential by expanding its geographic presence to tap into new markets and diversify its customer base.
Investment in Ento Proteins can help enter emerging markets, offering the potential for sustainable growth.
Regulatory risks concerning food safety, environmental sustainability, and animal welfare.
Any changes could impact Mukka Proteins’ operations and profitability.
Fluctuations in global commodity prices of soybeans and corn, which are alternative protein sources, can indirectly impact the demand.
Environmental concerns exist as reliance on marine resources raises concerns about overfishing and the environmental impact of its operations. 

So, there you have it! Mukka Proteins’ IPO offers a chance to be part of a company catering to the growing demand for animal feed in India. However, just like those tiny fish food pellets disappear in a flash, thorough research and careful consideration are crucial before you decide.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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