Indong Tea Company SME
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 09 Feb 2023 – 13 Feb 2023
- Listing date
- 21 Feb 2023
- Face value
- ₹10 per share
- Issue price
- ₹26 per share
- Lot size
- 4,000 shares
- Total issue size
- ₹13.67 Cr
- Market cap at offer price
- ₹39 Cr
- Promoter holding
- 96.09% → 64.03% pre-issue → post-issue
- ISIN
- INE0KN201016
- Registrar
- Cameo Corporate Services Ltd.
- Lead managers
- Finshore Management Services Ltd.
- Registered office
- Sikkim Commerce House, 4/1, Middleton Street, West Bengal
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Market maker | 5,04,000 | — | — |
Application size
Minimum 4,000 shares per lot, in multiples, at ₹26
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 4,000 | ₹1,04,000 |
| S-HNI (min) | 2 | 8,000 | ₹2,08,000 |
| S-HNI (max) | 9 | 36,000 | ₹9,36,000 |
| B-HNI (min) | 10 | 40,000 | ₹10,40,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 2.12 | — |
| P/E (×) | 12.26 | — |
| Market cap | — | ₹39 Cr |
Key performance indicators
- Return on net worth
- 15.24%
- PAT margin
- 7.00%
- EBITDA margin
- 18.83%
- NAV per share
- ₹13.94
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Indong Tea Company SME
Indong Tea Company Limited, incorporated in 1990 and converted to a public company in January 2022, owns and operates the Indong Tea Estate situated at Jalpaiguri District of West Bengal. The estate spans 740.38 hectares and includes tea plantation, tea factory, withering trough house, officer bungalows, staff quarters, labour quarters, pump house, and general stores. The company is engaged in tea plantation and manufacturing of CTC (Crush/Cut, Tear, Curl) tea. The company was acquired by Sri Hariram Garg in 2014, who brings several decades of experience in this sector and other diverse sectors. Revenue from CTC tea sales comprised 98.91%, 99.95%, and 100.00% of total revenue from operations for Fiscal 2022, 2021, and 2020 respectively. The company sells primarily through auctions regulated by the Tea Board of India via registered auctioneers.
Company Analysis
from RHPIndong Tea Company Limited owns and operates a tea garden and manufactures CTC Tea on West Bengal's Jalpaiguri District estate, spanning the tea plantation and processing industry.
Indong Tea Company Limited, incorporated in 1990 and converted to a public company in January 2022, owns and operates the Indong Tea Estate situated at Jalpaiguri District of West Bengal. The estate spans 740.38 hectares and includes tea plantation, tea factory, withering trough house, officer bungalows, staff quarters, labour quarters, pump house, and general stores. The company is engaged in tea plantation and manufacturing of CTC (Crush/Cut, Tear, Curl) tea. The company was acquired by Sri Hariram Garg in 2014, who brings several decades of experience in this sector and other diverse sectors. Revenue from CTC tea sales comprised 98.91%, 99.95%, and 100.00% of total revenue from operations for Fiscal 2022, 2021, and 2020 respectively. The company sells primarily through auctions regulated by the Tea Board of India via registered auctioneers.
Objects of the Issue
- Funding Capital Expenditure towards Extension, Uprooting, Infilling of Tea Plantation and Irrigation at Indong Tea Estate, Jalpaiguri, West Bengal ₹557.16 lakhs p.18
- Funding Capital Expenditure towards installation of additional plant and machinery for Tea Processing Unit at Indong Tea Estate, Jalpaiguri, West Bengal ₹310.86 lakhs p.18
- Working capital requirements ₹283.02 lakhs p.18
- General corporate purposes ₹100.00 lakhs p.18
- Issue related expenses ₹50.00 lakhs p.18
- Funding Capital Expenditure towards Extension, Uprooting and Infilling of Tea Plantation at Indong Tea Estate, Jalpaiguri, West Bengal ₹557.16 lakh p.60
- Funding Capital Expenditure towards installation of additional plant and machinery for Tea Processing Unit at Indong Tea Estate, Jalpaiguri, West Bengal ₹310.86 lakh p.60
- To meet the working capital requirements ₹283.02 lakh p.60
- To meet the Issue Expenses ₹50.00 lakh p.60
- General Corporate Purposes ₹100.00 lakh p.60
- —
Issue Structure
- Total Issue
- ₹1,301.04 lakhs
- Fresh Issue
- ₹1,301.04 lakhs (50,04,000 equity shares)
- Offer for Sale
- Nil
- Price Band
- ₹26 per equity share (fixed price)
- Lot Size
- 4,000 equity shares (minimum)
- Face Value
- ₹10 per equity share
Business Model
The company generates revenue primarily through the sale of CTC tea via Tea Board of India auctions managed by registered auctioneers (Parcon (India) Private Limited and J. Thomas & Company Private Limited, Siliguri), with a small portion of unsold inventory sold to customers outside the auction system. Revenue from operations for FY 2021-22 was ₹1,948.66 lakhs.
Business Segments
SWOT Analysis
- • Long-term government lease of productive tea estate(p.24)
- • Established tea production operations with significant asset base(p.18)
- • Operational since 1990 with experienced promoter leadership(p.18)
- • Established track record and experienced management(p.99)
- • Integrated plantation and processing operations(p.100)
- • Located in highly productive tea growing area(p.100)
- • Modern processing capacity and upgraded facilities(p.100)
- • In-house vermi-compost production capability(p.100)
- • Smooth customer flow and relationship management(p.99)
- • Significant plantation modernization and productivity improvement(p.114)
- • Substantially expanded irrigation infrastructure to manage climate variability(p.114)
- • Strong vertically integrated self-sufficiency in planting material(p.114)
- • Mechanization to address acute labor shortage in tea industry(p.114)
- • Significant capital investment and modernization of factory and processing machinery(p.114)
- • Strong product brand recognition and market pricing power(p.115)
- • Consistent production growth trajectory(p.114)
- • Regulatory permissions for diversification into tourism and allied activities(p.115)
- • Established tea estate with decades of promoter experience(p.184)
- • Large land holding with integrated operations(p.184)
- • Positive net worth and tangible assets(p.208)
- • Positive cash accruals in recent years(p.209)
- • Brand recognition and market presence(p.186)
- • Quality certifications and compliance(p.205)
- • High indebtedness creating financial vulnerability(p.25)
- • Heavy dependence on single product (CTC Tea)(p.27)
- • No formal customer agreements creating revenue instability(p.24)
- • Missing historical business documents prior to 2014 takeover(p.25)
- • Substantial outstanding litigation with significant financial implications(p.22)
- • Age-related succession risk in senior management(p.25)
- • Leasehold rather than freehold property ownership(p.24)
- • High labour-intensive operations and costs(p.100)
- • Limited brand recognition and domestic market penetration(p.100)
- • Heavy dependence on few customers(p.99)
- • Significant secured borrowing obligations(p.99)
- • Elevated financial leverage and debt servicing burden(p.151)
- • High interest expense reducing profitability(p.164)
- • Significant contingent tax liabilities pending(p.179)
- • Heavy dependence on director-provided unsecured financing(p.178)
- • Gratuity liability obligation and unfunded employee benefit commitment(p.148)
- • High financial indebtedness(p.179)
- • Dependence on limited number of customers/suppliers(p.184)
- • Contingent tax liabilities(p.189)
- • Promoter tax liabilities and litigation(p.192)
- • Outstanding unsecured loans from related parties(p.182)
- • High employee benefit expenses relative to revenue(p.185)
- • Capacity expansion through capital expenditure on tea plantation and factory(p.19)
- • Product diversification into green tea and flavoured teas(p.29)
- • India's strong global tea export position and domestic consumption(p.18)
- • Northern India's dominance as major tea producer region(p.18)
- • Tea Tourism policy support and allied business potential(p.100)
- • Vertical integration and international market expansion(p.100)
- • Growing domestic tea consumption(p.75)
- • Government promotion schemes for tea sector(p.77)
- • Capital expenditure plans for plantation and processing expansion(p.61)
- • Expansion into diversified income streams via tourism, wellness, and educational facilities(p.115)
- • Dairy and agricultural value-added product development(p.114)
- • Organic/specialty tea segment premium positioning(p.115)
- • Export market penetration and international tea demand growth(p.114)
- • India's large and growing tea consumption market(p.188)
- • IPO capital infusion and listing for growth(p.184)
- • Conversion of debt to equity improving capital structure(p.184)
- • Revenue significantly affected by rainfall variability(p.23)
- • Agricultural commodity exposure to weather and climate risks(p.23)
- • Labour-intensive industry vulnerable to strikes and wage pressures(p.24)
- • Intensive competition from organized and unorganized players(p.29)
- • Dependence on auction system for product sales(p.23)
- • Regulatory permit and approval renewal risks(p.23)
- • Commodity price volatility and input cost pressures(p.26)
- • COVID-19 pandemic ongoing impacts and uncertainty(p.31)
- • COVID-19 pandemic impact on revenue and profitability(p.100)
- • Highly seasonal industry with capacity underutilization(p.100)
- • Labour shortage during peak season(p.100)
- • Declining tea production in India(p.75)
- • Global competition from other tea-producing nations(p.78)
- • Factory capacity underutilization(p.105)
- • Acute and recurring labor shortage in tea industry(p.114)
- • Climate change risk and recurring drought conditions affecting crop yields(p.114)
- • Heavy environmental and pollution control compliance burden(p.109)
- • Stringent consumer protection regulatory requirements(p.109)
- • Complex foreign exchange management and export documentation obligations(p.111)
- • Multiple layers of GST compliance across supply chain(p.113)
- • Plastic waste management regulatory compliance costs(p.110)
- • Weather dependence and monsoon variability(p.186)
- • Production volatility from weather conditions(p.186)
- • Competitive market pressures(p.184)
- • Regulatory and policy risks(p.185)
- • COVID-19 pandemic impact(p.184)
- • Compliance and debt covenant risks(p.184)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Mr. Hariram Garg | Promoter | 19.04% | 12.68% |
| Mr. Madanlal Garg | Promoter | 4.67% | 3.11% |
| M/S. ASIAN TEA AND EXPORTS LIMITED | Promoter | 26.37% | 17.57% |
| Hariram Garg | Promoter | 19.05% | 12.69% |
| Madan Lal Garg | Promoter | 4.67% | 3.11% |
| Asian Tea and Exports Limited | Promoter | 26.39% | 17.58% |
| IBM Finance & Investment Pvt Ltd | Promoter Group | 12.34% | 8.23% |
| Asian Capital Market Limited | Promoter Group | 9.92% | 6.61% |
| Hariram Garg | Promoter | 19.05% | 12.69% |
| Madanlal Garg | Promoter | 4.67% | 3.11% |
| Asian Tea and Exports Limited | Promoter Group | — | — |
| Sri Hariram Garg | Promoter/Director | — | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.