City Crops Agro Limited- SME IPO
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blog/article-blog/City Crops Agro Limited- SME IPO

Sep 26, 2023

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City Crops Agro Limited- SME IPO

SME IPO

City Crops Agro Limited is an innovative agricultural company redefining urban farming. With a commitment to sustainable agriculture and cutting-edge technology, City Crops leverages vertical farming techniques to cultivate fresh and nutritious produce within the heart of urban environments. Their state-of-the-art facilities utilize controlled environments, precise automation, and data-driven insights to optimize crop growth, ensuring year-round harvests free from pesticides and environmentally friendly. City Crops is at the forefront of addressing food security and promoting sustainable agriculture, making fresh, locally-grown produce more accessible to urban communities while reducing the carbon footprint associated with traditional farming.

City Crops Agro IPO is all set to go live on the 26th of September.

The company intends to raise Rs. 15 Crore by issuing fresh shares. Let's understand in detail with the help of a table:


City Crops Agro Limited IPO Date/Timetable:

Company Name- City Crops Agro Limited

Open Date- 26th September 2023

Close Date- 29th September 2023

Lead Manager- Not Available

Issue Size- City Crops Agro is expected to issue Rs. 15 Cr. worth of fresh equity shares

Lot Size- 6000 Shares is the lot size

Issue Price- Issue Price would be Rs. 25 

Listing At- The IPO is set to be listed on the Bombay Stock Exchange (BSE)


City Crops Agro Limited- IPO- Promoters & Management:

The company has 4 Directors & 1 reported key management personnel. Zalak Gajjar holds a Key Management Post. She is the Company Secretary. Kaupilkumar Shah holds the post of Chief Financial Officer (CFO), along with being the director of the company.


City Crops Agro Limited- IPO- Financial Performance (In Thousands)

Period Ended

31 March 2021

31 March 2022

31 March 2023

Assets

246.99

1298.96

1357.09

Revenue

348.90

1775.69

962.72

Profit After Tax

4.32

48.41

61.31

Net Worth

5.08

1077.14

1138.49

Reserves & Surplus

4.08

45.50

106.81

Total Borrowing

0.51

5.01

2.01



City Crops Agro Limited- IPO- Comparison with Industry Peers


Categories

City Crops Agro

MK Exim.


Market Cap.

40.79 Cr.

300 Cr.

P/E

66.53

18.09

P/B

2.39

4.35

EV/EBITDA

17.85

9.19


City Crops has a market cap of just 40.79 Cr. which makes it a Micro Cap company in comparison to its peers MK Exim which stands with a market cap of 300 Cr. The P/E ratio of City Crops is more than 3x that of Exim Peer which is a slight concern although this might also be due to company’s rapid expansion. City Crops Agro has a book value that is half of its peer which was expected considering the company is still a small player in the overall market although a superior EV/EBITDA ratio suggests company has been performing well & is surely a good investment opportunity going forward.



City Crops Agro IPO- Analysis of Financial Performance:

The company has been investing in acquiring assets to expand which is evident from the fact that Assets have grown approximately ~ 5 times in the last 2 years.

The company’s revenue has also substantially increased, from Rs. 348 Cr. to Rs. 962 Cr. in 2023, signifying 3 times growth. The company’s PAT has grown by a whopping 14x while its Net worth has increased by a tremendous 224x in the last 2 years.

City Crops Agro has also emphasized building a healthy buffer of reserves & surplus which can be judged from the fact that the company’s reserves have grown by 25x in 2 years.

It’s also very likely that the company has been using its revenue to fund its expansion plans as revenue dipped in the last 1 year & borrowing has been very low overall.

Conclusion:

City Crops Agro Limited presents a compelling investment opportunity at the intersection of sustainability, technology, and agriculture. With their innovative approach to urban farming, they are not only addressing the pressing issues of food security and environmental sustainability but also tapping into the growing demand for locally sourced, fresh produce. As they continue to expand their footprint and enhance their capabilities, investors have the chance to be part of a transformative journey toward a more sustainable and resilient food supply chain.

Category: Investments

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