Hexagon Nutrition IPO

ADVANCED RESEARCH BASED NUTRACUTICAL AGENCY ONE OF ITS KIND ON INDIA GROWING CONSUMER AWARNESS TOWARDS NUTRITION INVEST EARLY IN NEXT MULTI BEGGAR Hexagon Nutrition is a differentiated and research-oriented pure-play nutrition company offering clinical products, micronutrient premixes, and therapeutic products since 1993. There is a growing demand for functional nutrition and Hexagon Nutrition has been able to move up the value chain with a presence across retail pharmacies, hospitals, and prominent e-commerce players. We market our  products across India and exports to around 70 countries to meet the demand for nutrition through Micro-nutrient premixes, Clinical Nutrition, and Therapeutic Nutrition. “PENTASURE”  is a leading name in the health, wellness, and clinical nutrition space and offers a complete source of nutrition for all age groups. The Covid-19 pandemic has made consumers increasingly aware of health and nutrition and Hexagon Nutrition can address this rapidly emerging requirement. With a focus on Innovation, our product portfolio addresses alleviation of malnutrition and daily nutritional requirements across demographics. Hence, with our manufacturing facilities located at Nashik, Chennai, and Thoothukudi (Tuticorin) and R&D facilities located at Nashik and Chennai, we are a fully integrated company engaged, right from product development to marketing including research and development and manufacturing, with a focus on quality control of nutrition products across diversified categories of nutrition products. Hexagon Nutrition Ltd has filed a DRHP with SEBI to raise up to Rs.600 crore. The issue consists of a fresh issue worth Rs.100 crore and an offer for sale of up to 30,113,918 equity shares. Arun Purushottam Kelkar is offloading around 77 lakh shares, 61.36 shares are being offloaded by Subhash Purushottam Kelkar, Anuradha Arun Kelkar is offloading 15 lakh shares, Nutan Subhash Kelkar is offloading around 25 lakh shares and 1.22 crore shares, and 73,668 shares are being offloaded by Somerset Indus Healthcare Fund I Ltd and Mayur Sirdesai respectively.  The book running lead managers to the issue are Equirus Capital Pvt Ltd and SBI Capital Markets Ltd.  Objective of issue Rs.33.5 crore is to be used to repay or prepay any debt undertaken by the company oritssubsidiaries-HNEPLanthill 2.    Rs. 15 crore will be used to fund incremental working capital requirements intercompany 3.    Rs.19.173 crore will be towards funding of working capital expenditure in order to expand the existing manufacturing facility at Nashik 4.    Rs.7.15 crore will be invested in their subsidiary, HNIPL for the financing of capital expenditure requirements at the facility in Thoothukudi Financials Risk The company is heavily reliant a select group of customers in the premix segment. Its top 10 customers constituted 51.7% of revenue in FY21 and its future operations is essentially linked to continuance of these relationships. The company does not maintain long-term contracts with third-party suppliers. As a result, its business may be adversely affected by a shortfall in supply, or increase in in price of raw materials. Inability to obtain or renew requisite statutory and regulatory permits and approvals for our business operations could affect cash flows. It's a distribution-based business model in India and overseas markets. It has 25 regional distributors in Latin America, South East Asia, Africa and the Middle East. Ability to expand and grow depends on the reach and effective management of distribution network. Failure to manage the distribution network efficiently will adversely affect business. The outbreak of Covid-19, or outbreak of any other similar severe communicable disease could have a potential impact on its business. Strengths Pioneer in micronutrient premix formulations business in South Asia and the market leader in customized premix formulations in India. The company has leading brands in wellness and clinical nutrition. Long-standing relationships with marquee clients leading to recurring revenues and repeat orders. Strong R&D capabilities with a focus on innovation. Extensive manufacturing capabilities of products with stringent quality and food safety procedures. Well-established pan India omnichannel distribution with presence across various geographies. Professional turned entrepreneur promoters with an experienced management team and backed by a reputed institutional investor. Performance matrices Peers in the industry Should you invest in this IPO or not ? Considering various factors such as strong fundamentals , reputed customer base, first movers advantage , barrier to entry in industry, recent consumer awareness towards nutrition and very strong future growth prospect , investors must subscribe to this IPO for long term investment irrespective of volatility in capital markets due to geo political tensions and interest rate hikes by central banks across the globe . Investors with moderate to high rick appetite and long term vision of wealth creation should subscribe to this IPO. Leveraging is not advisable for subscription to IPO since we might not see high listing gains for investors. Key words Nutraceutical industry, first movers advantage , strong fundamentals, clinical and therapeutic products , micronutrient premixes