Amir Chand Jagdish Kumar IPO

Amir Chand Jagdish Kumar (Exports) IPO: Key Details & Company Overview

Amir Chand Jagdish Kumar (Exports) Ltd., a leading processor and exporter of basmati rice, is preparing for its Initial Public Offering (IPO). The company filed its Draft Red Herring Prospectus (DRHP) and is awaiting final approval from the Securities and Exchange Board of India (SEBI). The public issue will be entirely a fresh issue of shares worth Rs 550 crore.?

About Amir Chand Jagdish Kumar (Exports) Ltd.

Established in 2003, Amir Chand Jagdish Kumar (Exports) is one of India's top five producers and exporters of basmati rice, with a legacy spanning over four decades in the food grains business. The company markets its products under the flagship brand "AEROPLANE".?

Key Business Highlights

• Product Portfolio: The company's products are divided into two main categories:?

  • Rice: Including basmati and other specialty varieties like Kolam, Sona Masuri, and Idli rice.

  • FMCG: A range of staple foods such as wheat flour, gram flour, salt, and sugar.

• Brand Strength: The "AEROPLANE" brand has strong recall and is positioned as a premium offering, with over 40 sub-brands like "La-Taste," "Alibaba," and "World Cup".?

• Integrated Operations: The company manages the entire basmati rice value chain, from procurement and storage to processing, marketing, and sales. It operates three manufacturing facilities in Punjab, Haryana, and New Delhi with a combined installed capacity of 550,800 metric tonnes.?

• Extensive Network: Amir Chand Jagdish Kumar has a robust procurement network of 325 agents across northern India and a distribution network of 425 distributors in India. It also has a strong global footprint, with 50 distributors across more than 37 countries.?

Amir Chand Jagdish Kumar IPO Details

While the IPO dates and price band are yet to be announced, key details from the DRHP are as follows:

• IPO Dates: To be announced

• Listing Date: To be announced

• Issue Size: Rs 550 crore (entirely a fresh issue).?

• Lot Size: To be announced

• Listing: The shares are proposed to be listed on both the BSE and NSE.

Use of IPO Proceeds

The net proceeds from the fresh issue of shares will be primarily used for the company's working capital requirements:?

• Working Capital: A substantial portion, Rs 500 crore, will be used to fund the company's working capital needs, which are significant due to the seasonal nature of paddy procurement and the need for rice ageing.

• General Corporate Purposes: The remaining funds will be used for general corporate purposes.

Financial Highlights

Amir Chand Jagdish Kumar has demonstrated consistent growth in its financial performance. For the fiscal year ending March 31, 2024, the company reported:?

• Revenue: Rs 1,551.42 crore

• Profit After Tax: Rs 30.41 crore

• EBITDA: Rs 109.66 crore

• Total Borrowings: Rs 777.62 crore, reflecting the high working capital intensity of the business.?

Key Strengths and Risks

Strengths

• Strong Brand: The "AEROPLANE" brand has a long-standing legacy and wide recognition.?

• Integrated Value Chain: The company's control over procurement, processing, and distribution ensures quality and cost efficiencies.?

• Global Presence: A strong export network, particularly in the Middle East, provides a diversified revenue base.?

Risks

• Working Capital Intensive: The business requires significant working capital for procurement and inventory aging, leading to high financing needs.?

• Dependency on Basmati Paddy: The company's heavy reliance on basmati paddy makes it vulnerable to price fluctuations and supply disruptions.?

• Regulatory Risks: The business is exposed to changes in government trade policies, and some of its packaging units are located in non-conforming zones, which poses a relocation risk.?

Frequently Asked Questions (FAQs) about Amir Chand Jagdish Kumar IPO

Q1: What does Amir Chand Jagdish Kumar do?
The company is a major processor and exporter of basmati rice and other FMCG products, best known for its "AEROPLANE" brand of rice.?

Q2: What is the size of the Amir Chand Jagdish Kumar IPO?
The IPO is a fresh issue of shares worth Rs 550 crore.?

Q3: When will the Amir Chand Jagdish Kumar IPO open?
The IPO dates, along with the price band and lot size, are yet to be announced.

Q4: How will the IPO funds be used?
The proceeds will be primarily used to fund the company's substantial working capital requirements.?