Regaal Resources
IPO Size: Rs. 306 cr
- Fresh Issue of Rs. 210 cr, to repay Rs. 159 cr of Rs. 453 cr net debt
- Offer for Sale (OFS) of Rs. 96 cr by promoter (99.6% to shrink to 70.4%)
Price band: Rs. 96-102 per share
M cap: Rs. 1,048 cr, implying 29% dilution
IPO Date: Tue 12th Aug to Thu 14th Aug 2025, Listing Wed 20th Aug 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Maize Wet Miller
Regaal Resources is a Kolkata based maize miller with 750 tonnes per day (TPD) installed capacity as of Nov 2024, at sole plant in Bihar. Its products include maize starch, modified starch, gluten, maize flour, icing sugar etc.
Doubling Capacity by March 2026
As existing capacity is fully utilized, company is undertaking brownfield expansion, to increase current capacity of 825 TPD, to 1,650 TPD by Q4FY26. This doubling of capacity will also include manufacture of value-added products like liquid glucose, maltodextrin, modified starch etc. which should expand margins FY27E onwards.
High Double-Digit Historic Growth
Company’s revenue grew at 34% CAGR between FY22 to FY25, rising to Rs. 915 cr in FY25. PAT surged at 22% CAGR in past 3 years to Rs. 48 cr in FY25, implying 5.2% net margin. On equity of Rs. 41 cr, face value Rs. 5 each, EPS stood at Rs. 6 for FY25. Net fixed assets were Rs. 371 cr as of 31.3.25, with Rs. 70 cr of capital work in progress. Company plans 30% debt reduction, reducing debt equity ratio to 0.6:1 post IPO, although net debt to EBITDA ratio will be high at 2.6x.
Priced Lower than Peers
FY26E based valuation does not capture performance surge of FY27E, when brownfield capacity gets commissioned. Hence, discounting Mcap of Rs. 1,050 cr by FY27E PAT of about Rs. 95-100 cr, leads to a PE multiple of 11x, on one year forward basis. This is lower than peers Gujarat Ambuja Exports (12x), Sukhjit Starch (14x) and Sanstar (17x).
Doubling capacity with ‘controlled’ debt levels and a favourable harvest expected this year are the key positives for the IPO. Even though geographic concentration risk remains due to a single plant.
13th Aug 2025 at 09:30 pm