IPO Alert: Hexagon Nutrition files papers to raise funds through IPO

The clinical nutrition sector, often referred to as the health and wellness sector, has a huge market in India. It comprises medical nutrition, enteral supplements, infant & child nutrition, functional foods and beverages. The medical nutrition market in the country was valued at $404.1 million in 2021, and is expected to grow at a compound annual rate of 8.6% through 2028.

Hexagon Nutrition recently filed preliminary papers with capital market regulator SEBI to raise up to ₹500-₹600 crores through an initial public offering. The public issue will consist of a fresh issue of equity shares aggregating to ₹100 crores, and an offer for sale of up to 30,113,918 shares, as per the draft red herring prospectus filed by the company.

Hexagon Nutrition and its subsidiaries will utilize ₹39.85 crores from the net proceeds towards repayment of loans. The company will deploy ₹15 crores for working capital requirements. It will use ₹19.17 crores for capital expenditure requirements and ₹7.14 crores for expanding its existing facility. The remaining amount will be used for general corporate purposes.

Company Profile

Hexagon Nutrition is a holistic nutrition player that offers products across the clinical, micronutrient premix, and therapeutic segments. The company is one of the largest players in the premix formulations space in India, and among the top five globally. It caters to the B2B, B2C, and the ESG segments, and is currently looking to tap into the tier-2 and tier-3 markets.

The Mumbai-based company has pan India omnichannel distribution capabilities, supported by its presence across retail pharmacies, hospital networks and prominent e-commerce players. The company, which has international offices in South Africa, Uzbekistan, and Hong Kong, has exported products to around 70 countries in the last six months.

Its top competitors in the nutrition space include Herbalife, Solen Cikolata Gida, Affinity, and Dawn Meats.

Key Figures

Hexagon Nutrition’s consolidated operating revenue grew 2.3% from ₹210.83 crores in fiscal 2020 to ₹211.5 crores in fiscal 2021. The company’s net profits grew by 13% from ₹19.7 crores to ₹22.26 crores.

The company imports various raw materials from overseas and the transactions are denominated in various foreign currencies including US dollar. The company has availed loans in US dollar as it exports products to a number of countries. Though the exchange rates have been favorable so far, potential fluctuations may affect the company’s profitability in the future.