Nekkanti raises $30 million pre-IPO funds from Motilal Oswal, others

Shrimp exporter Nekkanti Sea Foods Ltd has raised $30 million (₹205 crore) in a pre-IPO investment round, which saw participation from financial services firm Motilal Oswal and other prominent investors, said two people aware of the development.

Visakhapatnam-based Nekkanti is processor and exporter of processed frozen shrimp products with over three decades of operations. The company had filed its draft prospectus with the Securities and Exchange Board of India (Sebi) in March to raise around ₹ 750 crore, including a fresh capital raise of ₹ 250 crore.

“Nekkanti has closed a pre-IPO round, raising $30 million, in fresh capital. The round saw participation from Motilal Oswal and other prominent public markets investors such as New Horizon Investments, White Oak Capital and Madhusudan Kela," said one of the people cited above, requesting anonymity as he is not authorized to speak with the media.

White Oak Capital is an alternative asset manager founded by Prashant Khemka, former chief investment officer for Goldman Sachs Global Emerging Markets fund and India fund.

New Horizon Investments is managed by Madhav Bhatkuly. Kela, a renowned investor in Indian stock markets, was formerly chief investment strategist of Reliance Capital.

“New Horizon Investments has invested around ₹ 100 crore, while funds of Motilal Oswal have invested ₹ 70 crore. The rest came from Khemka and Kela," added the first person cited above.

According to the second person cited above, who also spoke on the condition of anonymity, Nekkanti plans to use the funds to meet its working capital requirements.

Nekkanti Sea Foods and Motilal Oswal declined to comment. Emails sent to Madhav Bhakuly, Prashant Khemka and Madhusudan Kela did not elicit any response.

According to the company’s draft prospectus, Nekkanti has three processing facilities along the coast of Andhra Pradesh. The company is also in the process of commissioning a processing facility in Nellore district in the state later this year.

Nekkanti caters to customers in the packaged food industry, food service companies and distributors catering to the retail segment with a focus on exports to the United States and Europe.

In fiscal 2017, Nekkanti had a volume share in the Indian shrimp industry of 2.49% with a value share of 3.31% of the total exports in such periods, according to a report by rating agency CRISIL.

In the financial year 2016-17, the company recorded revenue of ₹ 830.2 crore, up from ₹ 774.1 crore in the previous year. In 2016-17, Nekkanti had a profit of ₹ 5.1 crore, as against ₹ 29.6 crore in the previous fiscal, according to its draft prospectus.

Nekkanti is not the only shrimp exporter that has filed for an IPO.

Other Andhra-based shrimp exporters Devi Sea Foods Ltd and Sandhya Marines Ltd. too have filed their draft prospectus for initial share sales. Devi Sea Foods is looking to raise ₹ 900 crore, while Sandhya Marines is targeting around ₹ 500-600 crore.

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