Prospect Commodities IPO

The company is involved in the trading of agro products. Although it is a recently incorporated business, the promoter has several years of experience in the logistics industry and running a partnership business that primarily deals with the import and export of various agricultural commodities. In 2018, they started importing cashew husks from Vietnam and sold them to different tanning companies.

In 2021, they started a cashew processing firm with a capacity of processing 150 tonnes annually. It recorded a turnover of ₹987.98 lakhs, with ₹784.87 lakhs from agri products. From 2020 to 2021, the company grew at a 107% rate. 

Prospect Commodities Ltd. IPO Objective 

The company proposes to utilise the funds for the following objectives.

• Repayment of unsecured loans
• To fund long-term capital requirements 
• General corporate expenses 
• And, meeting public issue expenses

Why should you invest in Prospect Commodities Ltd. IPO?

Here are your top reasons to invest in Prospect Commodities Limited IPO.

• The company has increased its capacity from 150 tonnes per year to 600 tonnes per annum. 
• They have strong business relationships with internal and external partners, with extended experience in trading agricultural products.
• They cater to the PAN India market, although they successfully sell their entire cashew proceeds in Gujarat only. 
• They have a solid product quality monitoring and after-sale services policy. 

Prospect Commodities Ltd. Noteworthy highlights 

• Prospect Commodities Limited has taken over the entire business of the erstwhile partnership firm, including all liabilities and assets.
• The company operates in the B2B model, selling to wholesalers in Gujarat.
• They have increased their installed capacity from 150 tonnes annually to 600 tonnes to meet growing demands.

Know before investing

Strengths

1. Quality assurance and constantly meeting the quality standard demands of clients.

2. They have a robust sales channel for the smooth operation of their B2B business.

3. They are focusing on geographical expansion and entering the B2C category.

Risks

1. The company is struggling with low production capacity and working capital constraints.

2. Prices are affected by the changes in customs duty in importing countries.

3. The company faces competition from other manufacturers offering lower prices.