HVA Foods Limited is one of the fully own subsidiary of HVA Lanka Export (Pvt) Ltd. HVA Foods Limited intention to rise Rs.318, 857,568 from the Initial Public offerings by 30% of their stake.

The company is going to offer 19,928,598 Ordinary voting shares at Rs.16 each. The IPO will open January 12, 2011 and closing will be on 1st February 2011 or on the date on which the issue is over subscribed.  

”]HVA Food Limited prospectusThe Investors are instructed a minimum subscription should be 100 shares (Rs.1, 600) and excess subscription should multiples of 100 shares.

The primary objectives of IPO as,

  1. Rs.45 Million for payment for the acquisition of HVA Holding Private Limited for the Assignment of international Brand rights.
  2. Rs.95 Million will utilized for settle banks loans.
  3. Rs.102 Million to develop Tea Plant
    1. Rs. 26 Million for Ice Tea Plant
    2. Rs. 76 Million for Tea bagging Plants.
  4. Rs.76 Million [Approximately] for working capital Requirements.

My personal Opinion

As per I look at the prospectus and my understandability, the HVA is over Valued of their shares. And their purpose of Initial Public Offering is not satisfying on long term perspective.

HVA plan to spend about Rs. 140 Million for the brand and the Bank Loan settlement; which is 44% of their IPO fund rise.

Still the HVA Foods Limited not in the Top ten Srilanka Exports of Value added tea, and facing a huge competition from its competitors.

So I feel HVA focus beyond their capacity.

But in CSE [Unpredictable market]

HVA Foods Limited may be a good investment for a short term Profit seekers than focus long term benefits [Hopes].

For More Information

CSE: http://www.cse.lk/welcome.htm

Prospectus: http://www.cse.lk/270808/pdf/HVA-prospectus.pdf

Application Form: http://www.cse.lk/270808/pdf/HVA-application-form.pdf

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