Apex Frozen Foods IPO covered six times on final day

The initial public offering of Apex Frozen Foods Ltd, Thursday, was covered six times on the third and final day of the share sale.

Retail investors led the show with the portion earmarked for them being covered over eight times. High net-worth individuals and corporates bid for just under eight times their portion, while institutional investors bid twice the number of shares allocated to them.

The company is planning to raise Rs 152 crore from the IPO, which opened on Tuesday. The total issue size is 62.1 lakh shares.

The producer of aquaculture products had raised Rs 43.57 crore ($6.8 million), Monday, via a share sale to anchor investors ahead of the three-day IPO. Apex Foods had raised the capital from three mutual funds – HSBC Mutual Fund, Reliance Mutual Fund and Invesco Mutual Fund – by selling 24.9 lakh shares at Rs 175 apiece, the company said in a stock exchange filing. The shares were subscribed at the upper end of the Rs 171-175 price band.

Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.

Apex Frozen Foods is based out of Kakinada in Andhra Pradesh. It is a producer and exporter of aquaculture products. The company was initially formed as a partnership firm in October 1995 as Apex Exports. Apex Frozen Foods was incorporated in March 2012.

The company is promoted by father-son duo Karuturi Satyanarayana Murthy and Karuturi Subrahmanya Chowdary. The promoter group holds 99.9% stake in the company.

It has a shrimp processing facility with a capacity of 9,240 metric tonnes per annum. It plans to use the net proceeds from the IPO to set up another shrimp processing unit with an annual capacity of 20,000 metric tonnes.

In 2016-17, Apex’s operating revenue stood at Rs 699 crore and profit after tax was Rs 24.92 crore.

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