We are open to acquisitions on a case-by-case basis

Kolkata-based Annapurna Swadisht, a packaged snacks, food and beverage company, has filed Draft Red Herring Prospectus (DRHP) with NSE Emerge for its proposed Initial Public Offering (IPO). The IPO comprises the issue of 43.22 lakh equity shares (face value ₹10) through the book-building route.

It has appointed Corporate Capital Ventures as the lead manager for the issue. Ravi Sarda, company's Chief Financial Officer(CFO), speaks to Bizz Buzz on company's growth plans.

Excerpts:

Can you share Annapurna's growth plans?

We are setting up two state-of-the-art manufacturing facilities at Gurap and Dhulagarh in West Bengal. Both the regions are strategically located to cater to the newer markets with minimal logistic cost. We plan to invest close to Rs 21.72 crore on capital expenditure and the new upcoming facilities."

Which regions the company plans to expand its product basket?

We currently have around 400 distributors We are aiming at segment leadership through a widespread & efficient distribution policy. In West Bengal, where we have 100 per cent district penetration, the aim is to substantially increase our turnover through a diversified portfolio and dynamic distribution plan. We have 40-50 per cent district penetration in Bihar and aims to double the distributor count. In Jharkhand, we have over 90 per cent district penetration and looking to double the distributor count. We are also focusing at increasing its penetration in Odisha. We've recently entered Guwahati with focus on the entire North-eastern market, where we will continue to push our products and capitalise on the growing snacks market in the region.

How much does the company plan to raise through the IPO and for what purpose?

We plan to raise around Rs 21.73 crore for its capex requirement for its two upcoming facilities coming up at Dhulagarh and Gurap and the remaining IPO proceeds would be used for general corporate purpose.

How much did the company raise from big investors during the pre-IPO round of funding?

Shankar Sharma, one of India's most eminent investors and the Founder of First Global, has come onboard in his personal capacity. In addition, Amit Bhartia, erstwhile Partner, GMO Singapore Pte, too invested in his personal capacity. Bhartia is a portfolio manager for GMO's Emerging Markets Equity team and oversees fundamental research. Other marquee institutional investors include NAV Capital Emerging Star Fund and Rajasthan Global Securities, a qualified institutional investor and one of the largest investors in the SME segment has also invested in the pre-IPO stakes in the company. All the marquee investors together have bought 7.85 per cent stake in the company.

Can you share company's financial growth in the last few years?

We have delivered a strong all-round performance in a year that was considerably challenging due to multiple pandemic waves. Revenue from operations increased from Rs 20.29 crore in FY21 to Rs 61.05 crore in FY22. This jump was owing to presence in newer territories, better coverage of existing regions, and increased product basket mix. EBITDA increased from Rs 1.48 crore in FY21 to Rs 5.14 crore in FY22 while net profit improved from Rs 0. 51 crores to Rs 2.41 crore over the same period.

Net cash flow from operations stood at Rs 1.74 crore in FY22 against a negative cash flow of Rs 1.30 crore in FY21. Shareholders' funds increased from Rs 2.31. crore as on March 31, 2021 to Rs 7.55. crore as on March 31, 2022, while long-term debt dropped from Rs 3.93 crore as on March 31, 2021 to Rs 3.47 crore as on March 31, 2022, strengthening the company's financial stability.

Any acquisition plans in the near future?

We are open to explore acquisitions on a case-by-case basis, especially on the distribution front. Also, we will also prefer a share swap deal and expect the target companies' promoters to stay invested for some time before cashing out. As of now, we are looking at acquisitions in East India to bolster our distribution channels. Our ideal targets would be snack manufacturers with a network of at least 150 to 200 distributors."