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CARE has assigned 'CARE IPO Grade 3' to the proposed initial public offer of Surya Food & Agro Ltd, which indicates 'Average Fundamentals'.
CARE assigns IPO grades on a scale of Grade 5 to 1, with Grade 5 indicating strong fundamentals. CARE's grading is an opinion on the relative fundamentals of the issuer.
Surya Food & Agro is planning an IPO aggregating Rs 135.90 crore for which the price band is yet to be fixed.
The grading takes into account the strong brand image and market position of the company in the biscuit segment, especially in the North Indian market, brand recognition in juices segment, experience of Surya Food's promoters, moderate level of corporate governance and low leverage ratios.
The key grading constraints are relatively smaller size of operations compared to company's competitors, low profitability and projects under implementation.
Surya Food has three wholly owned subsidiaries, namely; Surya Fresh Foods which manufactures fruit juices under the brand name of 'Fresh Gold' and aerated fruit drinks called 'Treat'; Devika Food Products which has biscuit manufacturing facility at Surat; and Surya Processed Food which proposes to enter into diary products and chocolates.
The company is promoted by Ballabh Prasad Agarwala, chairman cum managing director, and his three sons, Manoj Kumar Agarwal, Navin Kumar Agarwal and Shekhar Agarwal, the whole time directors of the company.
Surya Food and Surya Fresh Foods currently have installed capacity to manufacture 85,000 mtpa of biscuits and 130 kilolitre per day of juices. Source : The Economic Times |
