Mukka Proteins Limited

Mukka Proteins Limited–IPO DETAILS 

Company Overview 

Mukka Protein is a leading manufacturer and supplier of fish protein products, offering fish meal, fish oil, and fish soluble paste, which serve as vital ingredients in the production of aqua feed, poultry feed, and pet food. Renowned for its pioneering work in the fish oil industry, Mukka Protein has successfully commercialized insect meal and insect oil, introducing them as ingredients for aqua feed and pet food. Moreover, the fish oil produced by Mukka Protein finds applications across various industries, including pharmaceuticals, soaps, leather tanning, and paints. 

The company's products are exported to more than 10 countries across Asia, highlighting its global reach and market presence. Mukka Protein operates six manufacturing facilities, with four situated in India and two in Oman, managed by its foreign subsidiary. Additionally, the company boasts three blending facilities and five storage facilities in India, strategically located near the coastline to facilitate efficient logistics operations.  

These manufacturing facilities collectively have an impressive annual capacity, capable of producing 1.15 Lakh Metric tonnes per Annum (MTPA) of fish meal, 16,950 MTPA of fish oil, and 20,340 MTPA of fish soluble paste. Mukka Protein also maintains contractual agreements with third-party manufacturing units located in Karnataka, Gujarat, and Maharashtra for the supply of fish meal and fish oil, further enhancing its production capabilities and supply chain efficiency. 

Objective of the IPO 

Here are a few quick reasons why company is going public:  

1. ₹120 crore will be allocated for funding the working capital requirements of the company. 

2. ₹10 crore will be utilized to invest in its associate company, Ento Proteins Pvt Ltd, specifically for its working capital requirements. 

3. Allocation of funds for general corporate purposes.   

Company Financials 

Key Performance Indicator 

Pros 

1. The company is a leading manufacturer and exporter of fish protein products, holding the prestigious recognition of being a Three Star Export house by the Ministry of Commerce. With an impressive market share of 18% in India's fish meal exports, it commands a significant presence in the industry. 

2. Having fostered strong relationships with its customers, the company derives approximately 19.61% of its revenue from clients with whom it has maintained relationships spanning at least five years. Furthermore, the company continuously expands its customer base, both domestically and internationally, ensuring sustained growth. 

3. Benefiting from strategically located facilities along coastlines, the company optimizes its operations by sourcing pelagic fish, a key raw material, while simultaneously reducing transportation costs and facilitating export activities. 

4.  The company faces entry barriers in its sector due to stringent regulatory requirements governing facilities involved in the manufacturing of fish meals and fish oil, given their direct or indirect impact on human consumption. Additionally, the imposition of a moratorium by the Marine Products Export Development Authority on new fish meal and oil facilities serves as a deterrent to potential competitors, further solidifying the company's position in the market. 

Cons 

1. The company is involved in a legal proceeding related to an alleged violation of environmental norms, with the Karnataka Pollution Control Board ordered by the high court to inspect Mukka's manufacturing plant and submit a report. Although the case has been adjourned without further hearings, an adverse ruling could potentially disrupt the operations of Mukka's largest facility. 

2.  There's also a significant revenue concentration risk, with nearly 37% of the company's revenue derived from its top two customers and 53% from its top five customers in FY23. This highlights the potential impact of reliance on a few key clients. 

3. Moreover, the company faces challenges due to high working capital requirements, currently utilizing 83% of its working capital including credit limits. Any additional capital needs would necessitate debt issuance, adding strain to its financials. However, the company plans to address this by issuing shares in the IPO and utilizing the proceeds to bolster its working capital. 

How to Apply for this IPO 

1. Go to https://ipo.adityatrading.in/ 

2. Enter your Client ID 

3. Enter the OTP received in your registered mobile number. 

4. Choose the IPO and click on apply button. 

5. Enter the UPI ID, Quantity, and Cut off the price. 

6. Click on submit button 

7. Confirm the mandate request received on your phone by entering the UPI Pin. 

You can also watch our youtube video on “How to Apply on IPO” by clicking on the link “https://www.youtube.com/watch?v=1qOI8dCpl1I&ab_channel=ATS”