INITIAL PUBLIC OFFERNING | SAMEERA AGRO AND INFRA LIMITED

Summary

On 15th December, 2023, ‘Sameera Agro and Infra Limited’ officially issued its Prospectus mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from Thursday, 21 December, 2023 and closes on Wednesday, 27 December, 2023. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

INITIAL PUBLIC OFFERNING | SAMEERA AGRO AND INFRA LIMITED

On 15^th December, 2023, ‘Sameera Agro and Infra Limited’ officially issued its Prospectus mentioning the important details regarding its recent Initial Public Offering (hereinafter referred as IPO) which will start from Thursday, 21 December, 2023 and closes on Wednesday, 27 December, 2023. In this article we will look at some Important Financial Details of the company and the IPO, which investors need to consider before investing in a right company.

ABOUT THE COMPANY

As per the details of the company present on its official website, the company was incorporated in the year 2002 with its official name as ‘Sameera Homes Private Limited’ which was later changed in the year 2020 to ‘Sameera Infra Projects Private Limited’. Subsequently in the year 2023, the company has changed its business model from private to public and renamed it as ‘Sameera Agro and Infra Limited’. The Company is primarily involved in a multi-faceted business of infrastructure development and construction of ‘Residential, Commercial spaces, Apartments, Townships, Multi storied complexes, Gated communities, Landscapes, and other related works.’

BUSINESS OPERATIONS

The company is primarily involved in the business operation of infrastructure development and the construction of residential and other related works. Furthermore, the company also delves into the operation of agricultural related works such as, ‘Processing, drying, sale, purchase, marketing and distribution of agricultural commodities of pulses, cereals, grains, such as urad dal, moong dal, toor dal etc.’ Additionally, the company also provides a distribution network and warehousing facility for the storage of goods. The company is majorly involved in the business operations in the states of Telangana, Karnataka, and Maharashtra.

BOARD OF DIRECTOR AND PROMOTERS OF THE COMPANY

The company’s management includes the following members-

01.  Mr. Satya Murthy Sivalenka as Managing Director and CEO of the company.

02.  Mrs. Kameswari Satya Murthy Sivalenka as Non-Executive Director of the company.

03.  Mr. Devanand Subba Rao Challagulla as Non-Executive Independent Director of the company.

04.  Mr. Srinivasa Rao Gandla as Non-Executive Independent Director of the company.

05.  Mr. V.S.E.N.D. Seshasai as Non-Executive Independent Director of the company.

The Promoter group of the company involves Mr. Satya Murthy and Kameshwari Devi which individually holds the 78,64,000 and 3,53,800 in the company.

KEY FINANCIAL DETAILS OF THE COMPANY

In the fiscal year 2022-23, the Company has achieved a noteworthy revenue from its operations of Rs. 13881.83 Lakhs, while securing a profit of Rs. 1364.99 Lakhs, a substantial improvement compared to the preceding year when they incurred a profit of Rs. 372.76 Lakhs in FY 2021-2022. Furthermore, as of September 30, 2023, the company has sustained its positive performance, with a profit of Rs. 941.44 Lakhs for the current year.

To make a wise investment choice, we will delve into various financial ratios for a comprehensive assessment of the company's financial condition and performance.

DETAILS OF THE IPO

‘Sameera Agro and Infra Limited’ is offering 34,80,000 Equity Shares at a price of Rs. 180 each which will aggregates to the total of Rs. 62,64,00,000. Out of this, 1,84,000 Equity Shares worth Rs. 3,31,20,000 are reserved for the Market Makers, and 32,96,000 Equity Shares worth Rs. 59,32,80,000 are set aside for the Net Issue to the Public. Half portion of the Net Issue to the Public is reserved for the Retail and Non-Retail Investors each.

Some Important details with respect to the Application Size for Qualified Institutional Bidder and Non-Institutional Investor has been Summarised in the following table:

OBJECTIVES OF THE IPO

The objective of the issue of the IPO is for (i) Construction of Ongoing Projects; (ii) Construction of new Multiplexes; (iii) Meeting the working capital expenses of agro business; (iv) meeting the general corporate expenses of the company.

RISKS INVOLVED

Before investing in the company, it also becomes important to also look at the various risks of the company which can affect its business operation and its profitability. Some critical internal risks of the Sameera Agro and Infra Limited are summarised in the following points:

01.  Heavy Reliance on Agro Business Revenue- The company is majorly dependent on its Agro Business and the revenue generated from its Agro sector. This heavy reliance on the Agro Business for most of the revenue is a substantial risk. Any adverse effect on its demand, market position, or its reputation in its key functioning areas can adversely affect the company’s profitability. Additionally, the loss of major customers, increasing competition, change in industry outlook can also disrupt the cash flow of the company and can adversely affect its overall financial standing in the market.

02.  Geographical Concentration of Business Operation- The company is geographically concentrated on specific states for its revenue generation. It is also one of the key risks of the company, as operating mainly in the states of Telangana and Andhra Pradesh makes the company vulnerable to political instability, economic fluctuations, policy changes impacting the operation and financial standing of the company.

03.  Labor-Related Issues: Because the firm relies on contract labour for projects, it is vulnerable to labour shortages or conflicts, which might disrupt project timetables and increase operational expenses. Inability to bargain with labour or get required manpower might have an impact on operations and financial performance.

04.  Dependence on Third-Party Transportation: Relying on third-party transportation providers for product delivery and raw material supply exposes the company to the risk of delays, damages, or losses during transit. Uncertainties in the supply chain and a lack of written contracts with carriers might disrupt operations, hurting business outcomes.

05.  Working Capital Management: High working capital requirements, particularly in debtors and inventory, make managing cash flows difficult. Inaccurate credit conditions with consumers may result in bad debts, liquidity concerns, and increased finance expenses, all of which have an influence on profitability.

IMPORTANT DATES