Shares of basmati rice exporting companies were in good demand on BSE after an Indian company in the same business listed successfully on the New York Stock Exchange.
Amira Nature Foods on Wednesday got listed on NYSE, but closed four per cent lower. The Dubai-based packaged rice selling company had to lower its offer price to $10 a share from $13-$15 due to lukewarm response.
An indicator
Even though the response for Amira Nature was not that great, it proved to be an indicator on the valuation for Indian company, said an analyst.
Given the closing price of Amira Nature on the NYSE, the BSE-listed LT Foods, Kohinoor Foods and KRBL are trading at a discount in India, he said.
“Global slowdown has no cascading effect on the demand for basic staples. To compound the demand, this year US too is witnessing severe drought, which would affect the other main staple wheat. Hence, we anticipate significant demand shift happening in the rice segment,” said a note from Networth Stock Broking.
Kohinoor Foods products are sold in retail chains such as TESCO, Somerfield and ASDA in the UK, Costco in Canada, Hankyu, Daimaru and Takashimaya in Japan, Coles & Woolworths in Australia, Krogers, BJs and Whole Foods in the US, and Seven Eleven and Mustafa in Singapore.
In India, it is available at Metro Cash n Carry, Walmart, Reliance, Big Bazaar, Spencer's, Vishal, Hypercity, More, Nilgiris in India. Apart from basmati, the company has also made inroads in the ready-to-eat food category.
KRBL is the largest listed player in terms of installed capacity (195 MT an hr). The Company has integrated operations starting from grain production (contract farming) to finished rice production along with full product chains involving productive usage of by-products such as husk and rice-brans to generate power and healthy edible oil.
India exports about Rs 11,000 crore of basmati rice annually. Karnal in Haryana is the main hub for basmati rice trade. Rice worth Rs 1,600 crore is exported annually from this region.