Whey Finance

R&D driven Hexagon Nutrition files for Rs. 600 crore IPO


Mumbai-based Hexagon Nutrition Limited (HNL), a fully integrated company engaged in product development and marketing, research and development and manufacturing of nutritional products, with an emphasis on quality, filed preliminary documents. with capital market regulator Sebi to raise funds through a first sale of shares.

The initial public offering (IPO) with a par value of Rs. 1 per equity share consists of a new issuance of equity shares in the aggregate amount of Rs. 100 crore and a sell offer of up to 30,113,918 shares, according to the draft prospectus on red herring (DRHP).

According to market sources, the issue size will be approximately in the range of Rs. 500-600 crore.

The sale offer includes up to 7,700,000 shares by Arun Purushottam Kelkar, up to 6,136,000 shares by Subhash Purushottam Kelkar (the promoter’s selling shareholders.), Up to 1,500,000 shares by Anuradha Arun Kelkar, up to 2,500,000 shares by Nutan Subhash Kelkar, up to 12,204,250 shares by SomeRs. and Indus Healthcare Fund I Limited and up to 73,668 shares by Mayur Sirdesai (the “other selling shareholders”).

The proceeds of its new issue are worth Rs. 33.5 crore will be used for the repayment or early repayment of loans, in whole or in part of all or of some loans for the company and its subsidiaries; Rs. 15.00 crore for financing additional working capital requirements; Rs. 19.17 crore to finance the capital expenditure required for the expansion of existing facilities; Rs. 7.15 crore for investments in subsidiaries and financing of capital expenditures in existing facilities and for general corporate purposes.

In 2016, Somerset Indus Healthcare Fund-I, along with Mayur Anand Sardesai, advisor and director of SomeRs and Health Capital Advisors, had invested Rs. 25 crore for a 10% stake in the company. Somerset is an offshore private equity firm focused on healthcare investments in India.

Founded by Arun and Subash Kelkar in 1993, Hexagon Nutrition started out as a micronutrient formulations player, and today it has worked its way up the value chain to develop brands like “PENTASURE”, “OBESIGO” and “PEDIAGOLD” which are leading names in the health, wellness and clinical nutrition space. It is the only player in holistic nutrition that offers. products among clinical products, micronutrient premixes and therapeutic products. Its product portfolio includes food fortification, therapeutic nutrition, clinical nutrition and relief of malnutrition.

As a research-driven pure and differentiated nutrition company, it focuses on holistic nutrition products encompassing a broad range of nutritional and nutrition enhancing products, which sells its products in approximately 70 countries, currently from its three factories located in Nasik, Chennai and Thoothukkudi.

In order to develop and diversify its business over the past three fiscal years, the Mumbai-based company has continued to leverage its ability to implement new product launches and / or the introduction of products such as Penta Sure Fiber , Carboload and Penta Sure Whey Protein Max, in the branded nutrition product category.

In the absence of direct competition, however, it faces competition from various national and multinational companies through its branded (B2C) nutrition products such as Abbott Healthcare Private Limited, Nestlé Health Science, Zydus Wellness, Fresenius Kabi and Premix Formulations. (B2B) like DSM NV, Piramal Enterprises, PD Navkar Bio-Chem Pvt. Ltd.

By 2019, she had established a trading company in South Africa and plans to build a facility there. The company is also setting up a factory in Uzbekistan which is expected to start operations by the first quarter of 2022.

India’s nutrition for health and wellness market was worth $ 10.5 billion in 2020 and is expected to grow at a CAGR of 11.9% through 2025. Staple and processed foods are growing industrially produced in many developing economies, resulting in standardized and fortified healthy nutritious foods. . The Indian Food Fortification Premix market was valued at $ 80.0 million in 2020 and is expected to reach $ 149.6 million in 2026.

Operating income increased 3.01% to Rs. 209.97 crore for fiscal 2021 from Rs. 203.84 crore for fiscal 2020 mainly due to increased demand for the segments B2B2C and ESG and increased volume of premixes and therapeutic feeds sold, while its net profit increased 23.10% from Rs. 18.57 crore in FY20 to Rs. 22.86 crore in FY21.

Equirus Capital Private Limited and SBI Capital Markets Limited are the principal portfolio managers. at the question.