Buy, sell, or hold Uma Exports stock once it debuts on the market at a premium price?


Uma IPO Listing: Agricultural product and commodities trader's shares opened at Rs. 80 per share, up 17.65% from the IPO's upper price band of Rs. 68 per share. Uma Exports' market value increased to Rs 276.56 billion. On the BSE, a total of 4.69 lakh shares of the company were traded, resulting in a turnover of Rs 3.77 crore. The stock is trading at Rs. 76 on the NSE, an increase of 11.76% above the IPO issue price. The company's market value increased to Rs 269 crore. On the NSE, 9.73 lakh shares of the company were traded for a total of Rs 7.79 crore.

The company was able to raise Rs 60 crore through its first public offering, which was 7.67 times oversubscribed from March 28 to 30, 2022. The retail component of the issue was subscribed 10.11 times, while qualified institutional buyers and non-institutional investors bid 2.81 and 2.22 times the authorized quota, respectively. This indicates that the issue had a positive reaction from investors.

The issue's proceeds will be used by the company to meet its working capital needs. The offer's price range for equity shares was Rs 65-68.


While Sakuma Exports, a competitor, is listed at a market cap of more than Rs 330 crore, the business sought a market capitalization of Rs 229.9 crore at the upper price band.

Uma Exports trades and markets agricultural products and commodities including sugar, spices like dry red chilies, turmeric, coriander, and cumin seeds, foodgrains like rice, wheat, corn, sorghum, and tea, pulses, and animal feed like soybean meal and de-oiled rice bran cake.

What do Brokerages Say?

The issue was rated "avoid" by all brokerage houses due to the costly valuations, significant debt on its books, and poor margin profile.


Mardwadi Financial Services received an "Avoid" rating on the matter because it operates in a cutthroat market with poor margins and does not provide investors with much of a return on their investment. They continued, "Taking into account the FY21 adjusted EPS of Rs 3.63 on a post-issue basis, the business is going to list at a P/E of 18.71x with a market valuation of Rs 2,299 mn, whilst its peer, Sakuma Exports, is trading at a P/E of 16.20x. In each of the previous three fiscal years, Uma Exports reported a net profit of.

Hem Securities noted in a report that the company has outstanding total fund-based debt totaling Rs 5,628.20 lakhs as of September 30, 2021, and Rs 3,861.81 lakhs as of March 31, 2021, respectively. "Company has debt on the books despite dealing and marketing agricultural products and commodities. We advise "Avoid" the issue even though the company's other measures, such as margin and return on shareholder's funds, are stronger than their peers when considering the business profile & debt position, they continued.

Dr. Ravi Singh, Vice President and Head of Research at Share India, stated: "We advise investors to stay away from the Uma exports IPO due to the significant debt in its book and low margin profile. The costly corporate values do not provide investors with many benefits.


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