Gemini Edibles and Fats Proposed Rs. 2,500 Crore IPO Put in Abeyance by SEBI

5 August 2022
4 mins read
Gemini Edibles and Fats Proposed Rs. 2,500 Crore IPO Put in Abeyance by SEBI

SEBI has put Gemini Edibles and Fats India’s proposed Rs. 2,500 crores IPO (initial public offering) in abeyance, according to an update on their website. The company filed DRHP (draft red herring prospectus) with the Securities and Exchange Board of India (SEBI) on 9 August 2021 to go public.

However, as of 20 August 2021, SEBI has not disclosed its reasons to keep the issuance of observation in abeyance.

The following sections will go through the various details of Gemini Edibles IPO.

About the Company

Gemini Edibles and Fats India (GEFIL) is an 11-year-old firm engaged in manufacturing and distributing edibles oils and speciality fats in India. GEFIL is the market leader in Odisha, Telangana, and Andhra Pradesh and the third-largest in Karnataka. They sell their products to three verticals of consumers- Industrial consumers, branded retails consumers, and bulk merchandise.

They sell their edible oil products under the two brands ‘Freedom’ and ‘First Klass’. The former brand is for premium edible oils like rice bran oil, groundnut oil, sunflower oil, and mustard oil. The latter is the company’s brand for palm oils.

Gemini Edibles sells its branded consumer products in around 640 towns in South India via a network of over 1,100 distributors and traders, 30 depots, and 130 sales personnel. The company’s ‘Freedom’ brand of sunflower oil alone was sold to over 2,60,000 retail outlets as of June 2021.

GEFIL has three port-based manufacturing facilities on the Eastern Ghats, with a refining capacity of 2,615 metric tonnes per day. Their packaging capacity is at 3,988 metric tonnes per day as of June 2021.

Financial Performance of Gemini Edibles

The revenue from operations of GEFIL stood at Rs. 7,765.96 crores at the end of the fiscal year 2021. This is higher than their revenue at Rs. 6,500.25 crores at the end of FY2020. Their net profit between FY2020 and FY2021 stood at Rs. 570.77 crores.

The company has grown at a CAGR (compound annual growth rate) of 19.6% between FY2019 and FY2021. Their gross profit margin within the period had almost doubled.

As of March 2021, the following companies had a stake in Gemini Edibles:

  • Golden Agri International Enterprises: 56.27%
  • Black Riverfood: 25%
  • Alka Chowdhry: 11.56%

– among others. Now, let’s take a look at their proposed IPO.

Gemini Edibles and Fats IPO Details

On 9 August 2021, GEFIL filed DRHP with SEBI to raise Rs. 2,500 crores through an IPO. It was a pure OFS (offer for sale) of equity shares by the company’s promoter and existing shareholders. According to the DRHP, Gemini Edibles won’t receive any proceeds from the sale of shares. The shareholders offloading their equity shares for the IPO are:

  • Black Riverfood 2 Pte: Rs. 1,250 crores
  • Golden Agri International Enterprises Pte Ltd: Rs. 750 crores
  • Investment and Commercial Enterprise: Rs. 250 crores
  • Alka Chowdhry: Rs. 225 crores
  • Pradeep Kumar Chowdhry: Rs. 25 crores

The book running lead managers of the issue are Axis Capital, Kotak Mahindra Capital, Nomura Financial Advisory and Securities India, and Credit Suisse Securities India.

Final Thoughts

On 20 August, SEBI announced that the Gemini Edibles and Fats India IPO would be ‘kept in abeyance’ without disclosing any reasons. Since SEBI’s observations are the ‘go-ahead’ to float public issues, this will seriously affect the chances of this IPO opening.

According to SEBI’s website, the processing status of Gemini IPO’s draft offering papers will be updated every week. If you are interested in this IPO, we recommend that you keep checking its status regularly and be very careful about investing.

 

Frequently Asked Questions

  1. What is the current status of Gemini Edibles IPO?

As per the latest update on SEBI’s website, the IPO of Gemini Edibles has been put in abeyance, i.e., temporarily put on hold.

  1. When will we get the next update on the IPO?

The processing status on Gemini IPO will be updated weekly, and on 30 August 2021, we will get to know the status of the IPO as of 27 August 2021.

  1. What is the reason for putting the Gemini IPO on hold?

As of right now, SEBI has not disclosed the reasons for putting the Gemini IPO on hold.