Sona Machinery Limited’s IPO consists of a fresh issue of 36,24,000 shares aggregating to INR 51.82 crores. The company plans to utilize net proceeds to establish a new manufacturing unit at Ghaziabad and repay existing borrowing.
Sona Machinery Ltd IPO – Important Details
| Sona Machinery IPO Date | March 5, 2024 to March 7, 2024 |
| Sona Machinery IPO Listing Date | March 13, 2024 |
| Sona Machinery IPO Price | INR 136 to 143 per share |
| Sona Machinery IPO Lot Size | 1000 Shares |
| Sona Machinery IPO Total Issue Size | INR 51.82 crores |
| Sona Machinery IPO Basis of Allotment | March 11, 2024 |
| Sona Machinery IPO Initiation of Refunds | March 12, 2024 |
| Sona Machinery IPO Credit of Shares to Demat | March 12, 2024 |
| Sona Machinery IPO Issue Type | Book Built Issue IPO |
| Sona Machinery IPO Listing At | NSE SME |
Sona Machinery IPO – Company Profile
The company is a diversified agro-processing equipment manufacturer, manufacturing equipment for processing rice, pulses, wheat, spices, Barnyard Millet, etc. The product portfolio includes Grains Pre-Cleaner machines, Rotary Drum Cleaner, Vibro Classifiers, Stone Separator Machines, Paddy De-Husker, Husk Aspirators, Rice Thick/Thin Graders, Rice Whitener, Silky Polishers, Multi Graders, Length Grader, Belt Conveyer, Bucket Elevator, etc. along with the complete projects for rice mills and ethanol distilleries.
The services encompass engineering, erection, supervision, and machine commissioning, delivering a comprehensive end-to-end solution for the milling section, including grain unloading and milling solution up to pre-masher for ethanol distilleries and paddy unloading to rice packaging for rice mill industries.
The products are spread across various parts of India and have generated 98.87% of total revenue from domestic sales for November 30, 2023. Further, the company has also exported a small portion of its products to countries like Nigeria, Bangladesh, Kenya, Nepal, etc.
Sona Machinery Limited IPO – Fundamental Analysis
Sona Machinery’s IPO financials showcase a company experiencing rapid revenue and profit growth, significant equity increases, and improved financial ratios, positioning it as an attractive investment in the machinery sector with promising long-term growth prospects.
Revenue Growth:
The remarkable growth in revenue from ₹604.19 lakhs in FY2021 to ₹8,096.63 lakhs in FY2023 showcases the company’s expanding market presence and operational scaling.
Equity Growth:
Equity has exponentially increased, indicating strong investor confidence and successful capital utilization to fuel growth.
Profitability:
Profit after tax surged, reflecting enhanced operational efficiency and profitability. The increase from ₹27.81 lakhs in FY2021 to ₹768.36 lakhs in FY2023 signifies the company’s ability to capitalize on its revenue growth effectively.
Return on Net Worth (RoNW):
Despite a slight decrease in FY2023, the RoNW remains impressively high, indicating efficient profit generation from shareholders’ equity.
Diluted EPS:
The substantial increase in diluted EPS demonstrates the company’s growing earnings power per share, making it an attractive prospect for investors.
NAV per Equity Share:
The NAV per equity share has significantly increased, indicating an enhancement in the intrinsic value of the company’s shares.
Asset and Liability Management:
The growth in total assets, alongside a controlled increase in liabilities, suggests prudent financial management and operational efficiency.
Debt to Equity Ratio:
The improvement in the debt-to-equity ratio from 0.65 in FY2022 to 0.22 in FY2023 indicates a healthier balance sheet with reduced leverage.
Inventory Turnover Ratio:
A decrease in inventory turnover days from 72 to 26 highlights more efficient inventory management and operational processes.
Net Profit Ratio:
The increase in the net profit ratio suggests that the company is growing its revenue and becoming more profitable relative to its size.
Current Ratio:
The improvement in the current ratio signifies better liquidity and short-term financial health.
Sona Machinery IPO Financial Information
| Particular | As of 31 March 2021 | As of 31 March 2022 | As of 31 March 2023 |
| Revenue (₹ in lakhs) | 604.19 | 4,451.59 | 8,096.63 |
| Equity (₹ in lakhs) | 37.51 | 363.98 | 1,132.34 |
| Expenses (₹ in lakhs) | 575.78 | 3,994.80 | 7,058.78 |
| Profit and Loss After Tax (₹ in lakhs) | 27.81 | 326.47 | 768.36 |
| RoNW (%) | 74.14% | 89.70% | 67.86% |
| Diluted EPS only (₹) | 0.28 | 3.23 | 7.61 |
| NAV per Equity Share (₹) | 0.37 | 3.60 | 11.21 |
| Total Assets (in lakhs) | 732.21 | 1,516.58 | 2,858.19 |
| Total Liabilities (in lakhs) | 694.70 | 1,152.60 | 1,725.86 |
| Debt to Equity Ratio (in times) | NA | 0.65 | 0.22 |
| Inventory Turnover Ratio (in days) | 72 | 22 | 26 |
| Net Profit Ratio (in %) | 4.60% | 7.33% | 9.49% |
| Current Ratio (in times) | 0.67 | 1.11 | 1.27 |
Sona Machinery Ltd IPO Peer Comparison
There are no listed companies in India that are engaged in a business line similar to that of the company, thus, it is not possible to provide an industry comparison to the company.
Sona Machinery Ltd IPO Objective
The main objective is to fund the capital expenditure for establishing a new manufacturing unit in Ghaziabad (INR 28.91 crores) and repay a Letter of Credit facility (INR 2 crores) used to purchase machinery for the existing unit.
- To fund the capital expenditure requirement towards setting up a new manufacturing unit in Ghaziabad: The company intends to expand its manufacturing capabilities through manufacturing existing and new products like Hammer mill, pulverizer, Paddy Driers, etc. The company plans to utilize INR 28.91 crores for the said purpose.
- To repay the Letter of Credit facility availed by the company: The company purchased machinery i.e. Amada Laser Cutting Machine Model VS3015AJ-3KW with Stand and Accessories, for the existing manufacturing unit, for a total consideration of ₹ 2.96 crores, out of which the company has already made a payment of 0.95 crores and for balance payment of INR 2 crores, the company intends to repay with the funds raised in the IPO.
Sona Machinery Limited IPO Risks And Challenges
Sona Machinery faces risks of heavy dependence on sales in Uttar Pradesh, Chhattisgarh, and Bihar, exposing it to adverse regional developments. Seasonality in the agriculture sector causes fluctuating operating results. Additionally, the absence of long-term agreements with suppliers for raw materials increases vulnerability to cost increases or shortages.
- The company sells the products to more than 15 states & Union Territories in India, of which the majority of the revenue comes from Uttar-Pradesh, followed by Chhattisgarh & Bihar.
The sales from the top five geographical regions for the period ending November 30, 2023, comprise of 78.10%. Any adverse developments affecting the operations in these regions could hurt the revenue and results of operations.
- The agriculture sector is seasonal. The company experiences the effects of seasonality, which may result in the operating results fluctuating significantly and reducing sales.
- The company does not have any long-term agreements with suppliers for the raw materials, and an increase in the cost of or a shortfall in the availability or quality of such raw materials could hurt the business.
Sona Machinery Ltd IPO – Industry & Market Potential
Manufacturing is emerging as an integral pillar in the country’s economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. The Indian manufacturing industry generated 16- 17% of India’s GDP pre-pandemic and is projected to be one of the fastest-growing sectors.
The Indian agricultural sector will increase to US$ 24 billion by 2025. Indian food and grocery markets are the world’s sixth largest, with retail contributing 70% of the sales. India’s agricultural and processed food products exports stood at US$ 43.37 billion in FY23.
Rapid population expansion in India is the main factor driving the industry. The rising income levels in rural and urban areas, which have contributed to increased demand for agricultural products nationwide, provide additional support. By this, the market is being stimulated by the growing adoption of cutting-edge techniques, including blockchain, artificial intelligence (AI), geographic information systems (GIS), drones, remote sensing technologies, and the release of various e-farming applications.
Sona Machinery Limited IPO – Type of Offer
Sona Machinery Limited’s Initial Public Offering (IPO) comprises a fresh issue of 36,24,000 shares totaling INR 51.82 crores. The company intends to use the net proceeds to set up a new manufacturing unit in Ghaziabad and repay existing borrowings.
Sona Machinery Ltd IPO Offer Size
The offer size of Sona Machinery Limited’s IPO is INR 51.82 crores. The company intends to use the net proceeds to set up a new manufacturing unit in Ghaziabad and repay existing borrowings.
Sona Machinery IPO Allotment Structure
Sona Machinery’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 10% for Retail Individual Investors (RII) according to SEBI regulations.
● Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers, 15% Non-Insitutional Buyers, and 35% for Retail Individuals. These include entities such as banks, mutual funds, and insurance companies.
● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.
How to apply for a Sona Machinery Ltd IPO?
To apply for the Sona Machinery IPO through Alice Blue, you would typically follow these steps:
- Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.
- Check for IPO Details: Once your account is active, you can check for the Sona
Machinery IPO details in the IPO section of the Alice Blue platform.
Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
- Submit the Application: Confirm all your details and submit your application.
You can apply for the Sona Machinery IPO at Alice Blue in just a few clicks!
Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.
Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.
How do you check Sona Machinery IPO Allotment Status?
Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:
- Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
- Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
- Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
- Select the Sona Machinery IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Sona Machinery IPO.
- Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.
If you face any issues, it’s recommended to contact Alice Blue’s customer support for detailed assistance.
Apart from Alice Blue, there are other ways to check the allotment status of the Sona Machinery IPO:
● Registrar’s Website: Visit the website of Maashitla Securities Private Limited, the registrar of the Sona Machinery IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.
● NSE SME: You can also check the allotment status on the official websites of the National Stock Exchange (NSE) SME (Small Medium Enterprise) Platform. You would need your application number and PAN to check the status.
Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.
Sona Machinery Ltd IPO Offer Registrar
The registrar for the Sona Machinery Limited IPO is Maashitla Securities Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
Contact information for the registrar:
Maashitla Securities Private Limited
451, Krishna Apra Business Square,
Netaji Subhash Place, Pitampura,
New Delhi, 110034
Email: [email protected]
Website: www.maashitla.com
Sona Machinery Limited IPO – FAQs
The allotment date of the Sona Machinery IPO is March 11, 2024.
The price band of the issue is INR 136-143 per share.
Sona Machinery Limited’s IPO consists of a fresh issue of 36,24,000 shares aggregating to INR 51.82 crores. The company plans to utilize net proceeds to establish a new manufacturing unit at Ghaziabad and repay existing borrowing.
The listing date of Sona Machinery IPO is Mach 13, 2024.
