Maharaja Foods (Pvt) Ltd (MFL), a leading manufacturer and exporter of Sri Lankan foods and spices, will open its Initial Public Offering (IPO) on July 4, becoming Sri Lanka’s first women-owned enterprise with founders’ origins from the Northern Province to be listed in the Colombo Stock Exchange.
The IPO issuing 25 million shares or 20% of the ordinary voting shares of Maharaja Foods (Pvt) Ltd at Rs 5 will be up for subscription from July 4. The Company is being advised on the listing by Atarah Capital, which is also the lead manager to the IPO. MFL seeks to raise a total of LKR 125 million through public investment.
The share issue price is with a discount of 14.6% to the value per share derived using the selected peer entities’ PER multiples (i.e., LKR 5.73 per share) and 1.8% premium to the value derived based on the DCF method (i.e., LKR 4.91 per share). MFL Chairman cum Non-Independent Executive Director Vijayananth Guganathan stated that their company predominantly focuses on exports and raising fresh equity capital to finance business expansion and growth. “We will use the majority of IPO funds to set up a raw rice plant and a rice polishing plant, set up a Gingelly Oil plant, expand the building premises to increase warehousing capacity, and secure additional working capital” Vijayananth further stated.
Founded by the entrepreneur, late Sivasaraman Guganathan from Velani-Jaffna, the Maharaja Food Products brand was launched in 1995, supplying premium quality food items such as rice, potatoes, onions and lentils, etc., which were collected from the local farmers. After the demise of Guganathan, his spouse Thavamalar Guganathan took over the business in 2016, and the entity became a women-owned enterprise.
In 2022, MFL, which serves both local and export markets, assigned its local distribution to Maharaja Marketing (Pvt) Ltd (MML), one of its fully owned subsidiaries. The move aimed to focus more on exports.
In financial year 23/24, export revenue in USD terms reached the mark of 1 Mn US$ which is a 138% increase compared to 0.42 Mn US$ in financial year 22/23. The net profit margin has improved from 2% in FY 21/22 to 7% in FY 22/23 whereas the same has further increased to 9.2% in FY 23/24 with the increase in overall volumes and revenues.
Thushan Jayasuriya
