IPO REVIEW

HEXAGON NUTRITION LTD.

BUSINESS OVERVIEW
Hexagon Nutrition is a distinct and research-driven pure-play nutrition firm. They are the only holistic
nutrition provider with goods in the clinical, therapeutic, and premixed micronutrient categories. (Source:
Giract Report). The company mainly concentrating on nutritional supplements that offer a wide range of
nutritional and nutrition-improving benefits.

The product line covers a wide range of topics, including food fortification, therapeutic nutrition, clinical
nutrition, and the reduction of malnutrition. They are a fully integrated business that engages in everything
from product creation to marketing to manufacturing with an emphasis on quality. When they first entered
the market in 1993 as a provider of micronutrient formulations, they progressed up the value chain to create
the brands, "PENTASURE," "OBESIGO," and "PEDIAGOLD," which are now household names in the fields
of clinical nutrition, wellness, and health (Source: Giract Report). They are present all throughout India, and
have sold their products to around 70 other nations.

They classify there products mainly into Branded nutrition products/ clinical nutrition products (B2C
segment), Premix formulations (B2B2C segment),Ready to use foods (“RUFs”) and Micro Nutrient Powder
(“MNPs”) (ESG segment)

There are three manufacturing plants, located in Thoothukudi, Chennai, and Nasik, all in Maharashtra
(Tamil Nadu). These facilities are well-placed, providing quick access to the ports and duty-free imports at
Thoothukudi and Chennai, both of which are SEZs. The integrated and clearly defined production
procedures aid in maintaining the items' quality throughout time.

INDUSTRY OVERVIEW
A large increase in demand for functional nutrition is anticipated, which might be partly ascribed to the
demanding lifestyles of younger professionals. Furthermore, the functional drinks market is pushed by
young, dual-income households with growing earnings and a higher knowledge of good eating. The Indian
health and wellness nutrition market was valued at USD 10.5 billion in CY 2020 and is expected to develop
at an 11.9% CAGR until CY 2025. Many emerging economies are increasing industrial manufacturing of
basic and processed foods, allowing for standardized and fortified nutritional meals. Covid-19 has increased
nutritional deficiencies in low- and middle-income nations, particularly among disadvantaged populations,
highlighting the need for fortified and therapeutic foods. The Indian food fortification premix market was
valued at USD 80.0 million in CY 2020 and is projected to reach USD 149.6 million in CY 2026. The global
premix industry saw growth from USD 4.4 billion in CY 2018 to around USD 5 billion in CY 2020 and is
expected to grow at a CAGR of 4.4% from CY 2021 to CY 2026 (Source: Giract Report).
FINANCIAL INFORMATION
As of

Sept 30,2021 March 31, 2021 March 31, 2020 March 31, 2019
Equity Share Capital 110.50 110.50 110.50 110.50
Net worth 1,530.60 1,380.26 1167.36 992.47
Revenue 1248.87 2099.7 2038.42 2306.46
Growth in Revenue - 0.03 -0.12 -
EBITDA 233.86 343.99 296.6 257.37
Net Profit 152.09 228.61 185.67 148.25
EPS- Basic 1.38 2.07 1.68 1.34
EPS- Diluted 1.24 1.86 1.51 1.21
ROE as stated 65% 98% 80% 64%
ROCE 9.14% 16.07% 14.53% 14.69%
NAV per Equity Share 13.85 12.49 10.56 8.98
Total Borrowing 244.33 202.65 336.5 302.49

According to the Financials of the company there has been steady growth in both ROE and ROCE for
the past three years which is a positive sign and shows effective utilization of its resources and increased
profitability for its shareholders in terms of increase both diluted and basic EPS.

Though revenues may decreased since 2018-19, there has been steady increase in EBITDA and NPAT
since then as the Total Expenses for the company has decreased.

COMPARISON WITH LISTED INDUSTRY PEERS

According to the offer document, Hexagon Nutrition has shown Zydus Wellness, Nestle India, Dabur
India, Britannia Industries as its listed peers. They are trading at a P/E of 99.29, 87.89, 60.62, and 46.37
(as of March 31, 2021).

As per the offer document none of the listed companies in India are exclusively engaged in the portfolio
,of business similar to theirs. However, they have considered such companies who have food and nutrition
as one of their business segments as peers.

As compared the peers listed by the company, there is high potential for growth in total revenues as well
as Return on Net Worth. However ,the companies listed as peers cannot be compared as they are not
genuinely similar but give an indication how much potential sales can be captured by the company.



EPS

Face value Total NAV (1)

RoNW
Company Name (₹ per Revenue (in Basic Diluted (₹ per P/E
(%)
share) ₹ million) share)

Company# 1 2,154.35 2.07* 1.86* 11.24* - 16.56

Zydus Wellness Limited 10 18,756.10 19.55 19.55 717.84 99.26 2.6

Nestle India Limited 10 1,34,958.80 215.98 215.98 209.44 87.89 103.12

Dabur India Limited 1 98,869.40 9.58 9.55 43.36 60.62 22.1

Britannia Industries Limited 1 134,490.10 77.43 77.4 147.29 46.37 52.54

Source: All the financial information for listed industry peer mentioned above is on a consolidated basis and is
sourced from the annual audited reports of the listed peer for the year ended March 31, 2021, except for Nestle
India Limited where the financial year ended on December 31, 2020. ^Nestle India Limited has no subsidiaries as
of March 31, 2021. Hence consolidated financials are not applicable #Source for our Company: Based on the
Restated Consolidated Financial Statements for the year ended March 31, 2021. * Basic and Diluted EPS and
NAV is calculated post conversion of CCPS

ABOUT THE IPO

Hexagon Nutrition Ltd has filed a DRHP with SEBI seeking up to Rs.600 crore in funding. The offering
includes a fresh issuance of Rs.100 crore as well as an offer to sell up to 30,113,918 equity shares. Arun
Purushottam Kelkar is selling around 77 lakh shares, while Subhash Purushottam Kelkar is selling 61.36
shares. Arun Kelkar is selling 15 lakh shares, Nutan Subhash Kelkar is selling 25 lakh shares and 1.22
crore shares, while Somerset Indus Healthcare Fund I Ltd and Mayur Sirdesai are selling 73,668 shares
each.
Equirus Capital Pvt Ltd and SBI Capital Markets Ltd are the issue's bookrunning lead managers.