Nekkanti Sea Foods files papers for IPO

Sea foods exporter Nekkanti Sea Foods Ltd on Monday filed the so-called draft red herring prospectus (DRHP) for its proposed initial public offering (IPO).

With the filing of its draft IPO papers, Nekkanti joins other sea foods exporters Devi Seafoods Ltd and Sandhya Marines Ltd, which filed their draft papers in the last two-three weeks.

While Devi Seafoods is looking to raise Rs900 crore from its IPO, Sandhya Marines is looking at raising around Rs500-600 crore through its initial share sale.

According to a person aware of the IPO plans of Nekkanti Sea Foods, the sea foods exporter is looking to raise around Rs750 crore, of which Rs250 crore will be through a primary share sale for investment in the company’s operations.

Nekkanti plans to use the primary capital for its working capital requirements, according to its DRHP.

On 8 March, Mint reported that several sea foods exporters, including Nekkanti, are looking at going public, driven by strong growth witnessed by the industry in recent years and strong investor interest in listed sea foods companies.

Share price of listed peers Apex Frozen Foods Ltd and Avanti Feeds Ltd have in the last 12 months appreciated by over 200%, Mint reported.

In a note on 13 December, rating agency Crisil said it expects shrimp exports from India to nearly double to $7 billion by 2022, driven by strong demand, high quality, improved product mix and an increase in aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal—even as Asian rivals battle structural issues and rising domestic consumption.

India is the biggest exporter of shrimps, with $3.8 billion worth of exports in fiscal 2017, Crisil said.

Nekkanti has appointed investment bank Motilal Oswal to manage its initial share sale.