Visakhapatnam, Andhra Pradesh, India-based shrimp exporter Nekkanti Sea Foods Ltd. has reversed course on a planned initial public stock offering it had announced in March 2018.
In the past month, the company has bought back shares it issued in an initial fundraising round in advance of its planned IPO, according to Indian business news site Mint.
Nekkanti Sea Foods put more than INR 2.05 billion (USD 28.7 million, EUR 25.2 million) into the buyback, representing an estimated four to five percent of the company’s value, according to Mint. It raised the money from a select group of investment groups in April and May 2018 to use for working capital, with the understanding the company would go public on the National Stock Exchange of India and the Bombay Stock Exchange within six months the site reported.
Low prices for Indian shrimp in a soft global market, along higher-than-expected U.S. anti-dumping duties and a sag in valuation of small- and mid-cap companies in the Indian market led the company to pull its IPO, Mint reported.
Nekkanti operates three shrimp processing facilities in Andhra Pradesh, with a fourth unit under construction. It produces 2.5 percent of India’s shrimp exports by volume and 3.3 percent by value, primarily serving the foodservice and retail sectors in the U.S. and Europe, according to analytics firm Crisil, which covers the Indian market.
The company posted revenue of INR 8.3 billion (USD 116.3 million, EUR 102.2 million) in 2017, and its net profit was at INR 551 million (USD 7.7 million, EUR 6.8 million), according to its draft prospectus.
Two other Indian seafood firms have also delayed their IPOs. In January 2018, Devi Seafoods filed initial paperwork indicating it would pursue an IPO, with hopes of raising INR 10 billion (USD 156 million, EUR 130 million). But the firm has not taken any action to list itself in the interim. Nor has Sandhya Marines, which also took steps to launch an IPO in March, looking to raise INR 3 billion (USD 46.1 million, EUR 37.3 million), but which has since gone mum on its plans.
Photo courtesy of Nekkanti Sea Foods Ltd.
