Sona Machinery IPO(NSE SME) Overview

Sona Machinery Limited produces agricultural machinery for processing rice, pulses, wheat, spices, and Barnyard Millet. Sona Machinery IPO is set to raise Rs 51.82 crores. The issue is entirely a fresh issue of 36.24 lakh shares.

IPO opensMar 05, 2024
IPO ClosesMar 07, 2024
IPO Size (Rs.)₹51.82 Cr
IPO Size (shares)3,624,000 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹136 to ₹143 per share
Minimum Lot1000 Shares
Listing AtNSE SME
QIB ~50 % (less anchor)
NII Quota~15%
Retail Quota~35%
 Lead ManagerHem Securities Limited
Registrar Maashitla Securities
Market makerHem Finlease

About Sona Machinery Limited:

  • They are a diversified agro-processing equipment manufacturer, manufacturing equipments for the processing of rice, pulses, wheat, spices, Barnyard Millet etc.
  • Their product portfolio includes Grains Pre-Cleaner machines, Rotary Drum Cleaner, Vibro Classifiers, Stone Separator Machines, Paddy De-Husker, Husk Aspirator, Rice Thick/Thin Grader, Rice Whitener, Silky Polisher, Multi Grader, Length Grader, Belt Conveyer, Bucket Elevator etc. along with the complete projects for rice mills and ethanol distilleries.
  • Their services encompass engineering, erection, supervision, and machine commissioning, delivering a comprehensive end-to-end solution for the milling section

Financials: Sona Machinery Limited

Particulars / Rs. Cr30-Nov-23202320222021
Total Net Revenue6,275.288,096.634,451.59604.19
Profit After Tax647.82768.36326.4727.81
Paid up Share Capital1,010.00101010
Net worth1,780.161,132.34363.9837.51
EPS– Basic/Diluted6.417.613.230.28
NAV17.6311.213.60.37
Total Borrowing112.94252.6236.61
Post issue Share Capital1372   
FV10.0   
IPO price143.0   
EPS Fy235.6   
PE Fy2325.5   
EPS Fy24 (annualized)7.1   
PE Fy24  (annualized)20.2   
Market cap in Lacs19,619.6   
Market cap / Sales2.42   

Anchors: Sona Machinery IPO

Sona Machinery IPO: Salient Points

  • Majority portion of their revenue comes from the state of Uttar-Pradesh followed by Chhattisgarh & Bihar.
  • For the Fiscal 2023, their revenue from operations was ₹ 8096.63 Lakhs of which approximately 96.88% of the revenue were from domestic markets and 3.12% were from international markets.
  • The Net Proceeds are proposed to be utilized in the manner set forth below:
Sr. NoParticularsAmount
1.Funding the Capital Expenditure requirements of our company towards setting up of a new manufacturing unit at Ghaziabad.2,891.25
2.Repayment of the outstanding amount of the Letter of Credit availed by our company for purchase of machinery.200.80
3.General Corporate Purpose[●]
  • Key Performance Indicators of Company:
Key Financial PerformanceAs of and for the year/period ended
November 30, 2023FY 2022-23FY 2021-22FY 2020-21
Revenue from Operations6,275.288,096.634,451.59604.19
EBITDA948.351,196.15535.7940.40
EBITDA Margin (%)15.11%14.77%12.04%6.69%
PAT(4)647.82768.36326.4727.81
PAT Margin (%)10.32%9.49%7.33%4.60%
RoE(%)44.49%102.70%162.63%117.81%
RoCE (%)46.61%80.20%77.56%81.47%
  • Product-wise revenue:
  Product NamePeriod ended Nov 30, 2023% to Total SalesFY 2022-23% to Total SalesFY 2021- 22% to Total SalesFY 2020-21*% to Total Sales
Material Handling1,876.4429.92,925.0836.131,391.7831.26133.3122.00
Milling Machines1,275.8920.331,167.4514.42461.5110.3733.675.56
Cleaning Machine1,192.9619.011,615.9919.961,026.9623.07156.2425.78
Grading Machines873.9613.931,051.9212.99705.9915.8687.7014.47
Aspiration Machine395.356.3461.475.7206.354.6422.663.74
Spares, Scrap and Others312.414.98408.095.04325.697.32171.0728.23
Rice Blending224.023.57250.913.195.372.14
Accessories59.280.94206.792.55220.524.951.350.22
Service & Installation0.720.018.930.1117.420.39
Sortex64.251.02
Total6,275.281008,096.631004,451.59100606100
  • Peers: None
  • They also cater to customers who are engaged in Production of Ethanol (Grain Based Distilleries), by providing them Complete Project Set-ups in Unloading & Milling Sections.
  • They are currently in process of setting up an additional manufacturing unit in Ghaziabad, Uttar Pradesh, in order to increase manufacturing capabilities through manufacturing existing and new products like Hammer mill, pulverizer, Paddy Driers etc.
  • Sona Machinery is among the “Top 10 Industrial Service Providers” of 2022 as per Industry Outlook and is Awarded as “Prestigious Brands Asia 2023” in Agri-Machinery Manufacturing category by Barc Asia & Global Business Symposium.
  • Sona Machinery IPO is coming at a PE ratio of 25x (fy23 earnings) and 20x (Fy24 annualized earning)
  • I intend to apply in Sona Machinery IPO subject to availability of funds. They have income from several streams as well as geographies.
  • GMP as reported on social media has been Rs. 70.
  • Hem securities is the Lead Manager to the issue. The IPOs lead managed by them have given a good return to the investors. These include names like Harshdeep Hortico Limited, Megatherm Induction Limited, New Swan Multitech Limited, Shri Balaji Valve Components Limited, Shanti Spintex, SJ Logistics, Siyaram Recycling Industries Limited, Deepak Chemtex Limited, Paragon Fine And Specialty Chemicals, E Factor Experiences Limited, Arabian Petroleum Limited, ,Saakshi Medtech and Panels Limited, Kahan Packaging Limited, Asarfi Hospital Limited, Kaka Industries, Green Chef, Vasa Denticity, Chaman Mettalics, Hemant Surgicals, Labelkraft, Concord Control Systems Limited, Earthstahl & Alloys Limited, Silicon Rental Solutions Limited, Krishna Defence and Allied Industries, Prevest Denpro Limited etc.
  • SME IPO are much more risky and volatile than mainboard IPOs.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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