Megastar Foods Limited (MFL) is engaged in the manufacturing of food-based products. The produces of the company are mainly food products related to wheat flour i.e. atta-wheat, maida-fine wheat, suji or rawa-semolina, chokar or wheat bran, organic atta, organic whole wheat flour and organic wheat flour etc. MFL is coming up in the primary markets with their first ever initial public offering. Hence, it is time to publish our Megastar Foods Limited IPO Review for the investors.
About Megastar Foods Limited IPO :
- IPO Opens on – May 14, 2018.
- IPO Closes on – May 16, 2018.
- Face Value – Rs. 10 Per Equity Share.
- Issue Price – Rs. 30 Per Equity Share.
- Issue Type – Fixed Price Issue IPO.
- Market Lot – 4000 Shares.
- Minimum Order Quantity – 4000 Shares.
- Issue Size – 2,680,000 Equity Shares of Rs 10 aggregating up to Rs 8.04 Cr .
- Listing Exchange – BSE SME Exchange.
- Draft Prospectus – Download.
Objectives of the issue:
- To Meet Working Capital Requirement.
- General Corporate Purpose.
- To Meet the Issue Expenses.
About The Company –
- Megastar Foods Limited started their operations in 2011.
- This is also an FSSC 22000 certified company for food safety systems including ISO 22000:2005, ISO 22002-1:2009.
- MFL’s additional FSSC 22000 requirements for the processing (pre-cleaning, cleaning, milling, sifting) of wheat products like atta, maida, suzi, bran and its packaging in HDPE laminated bags and poly pouch bags is done by Intertek Certification Limited (ICL), United Kingdom.
- This company’s quality is in their DNA and the people at “Megastar” understand the importance of providing highly standardized food product to company’s clients and ultimate customers.
- Megastar Foods Limited also has a state of the art wheat processing plant in Punjab, India, with an installed capacity of 81000 MT per year.
- This company has 62 employees also including Key Managerial Personnel.
- Megastar Foods Limited is also exporting some of its products to United Nations Organization, Europe, United States and the Middle East.
Promoters of the company :
- Mr. Vikas Goel, aged 46 years, is one of the Promoters of this company.
- Mr. Vikas Gupta, aged 42 years, is also the other Promoter of this company.
Megastar Foods Limited IPO Review:
The draft red herring prospectus shows that MFL is a classic example of a turn around story in the financials. The company has posted net losses till FY 2015. But then the company has managed to return into profits and profitability has increased gradually. The current price to book value ratio for the company is just above 2. The company has also clocked earnings per share of 1 in the last few financial years. The price to earnings ratio is close to 25 which is compared lower than the peers. Hence, our Megastar Foods Limited IPO Review believes that the turn around story is yet to be unfolded fully. Hence, we feel that long-term investors will be able to multiply their returns in MFL.