Maiam Global Foods IPO Review


Maiam Global Foods is a prominent company in India engaged in the trading of Agro products. They are planning for an IPO. They have filed a draft red herring prospectus with the market regulator SEBI. They are going to issue 90 lakhs equity shares of Rs 10 each (face value). They are going to dilute 49.70% stake. Company is very aggressive in the trading and processing of agro foods like pulses, spices and edible oil. Company is also engaged in agriculture by cultivation, processing and distribution of vegetables and fruits. They have also restaurant business.

Out of the IPO money; Rs 22.59 Cr will be used for the setting up of new restaurants; Rs 13.75 Cr will be used for the cultivation of green house; Rs 4.21 Cr will be used to strengthen supply chain; Rs 1.85 Cr will be used for the modernization of plant and machinery for processing pulses and spices; Rs 13 Cr will be used for the working capital requirements. Comfort Securities will be the book running lead manager of the issue.

India is the fifth largest economy in the world according to the PPP. India is also a fastest growing economy in the world. Average Growth rate of Indian GDP in the last five years is 8.43%. Our economy is primarily an agricultural one. It is the livelihood of majority people. Agriculture has a key role in our export earnings. Indian agricultural sector contributes 25% of GDP.

Food processing is a large sector that covers the areas of agriculture, horticulture, plantation, animal husbandry, fisheries etc. Ministry of Food processing, Government of India includes the following areas to foods processing. They are dairy fruits, vegetable processing, grain processing, meat and poultry processing, fisheries, consumer goods like packed foods, beverages and packaged drinking water. Indian food processing industry is growing at a rate of 14.9%. India is both a producer and consumer of food products.

We have to understand the potential of a food processing company in a typical market. Company can create huge wealth in the coming years.  Let us check its financial statements.  For the quarter ended June 30, 2011, company reported an income of 29.81 Cr and a net profit of Rs of Rs 2.65 Cr. Company also reported a total income of Rs 89.33 Cr and a net profit of Rs 3.14 Cr in the year ended March 2011. Before investment, investors must study the company with its issue price. The IPO price band will be available soon.

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