About Indian Potash Limited Unlisted Share

(i) The saga of Indian Potash Limited began with the vision and hard work of a few dedicated people in the early fifties. Prior to 1950, the use of Potash was sporadic, almost insignificant, and demographically confined to a few southern states. Potash was unknown to Indian farmers and by the dedicated fieldwork there was the acceptance of potash across India and its success story is considered one of the most remarkable sagas in annals of the Indian fertilizer industry.

(ii) In light of the above, Indian Potash Limited was incorporated under the Indian Companies Act with the objective of promoting balanced use of Potash. Indian Potash is India's largest importer of Potash and has warehouses at all the major ports of India. The company has a PAN India dealership network to distribute Potash to the farmers. The company which was started as a trading company in Potash, today, has diversified into Dairy, Cattle Feed, Sugars, and Rural Warehousing.

(iii) Products of the Company:

Fertilizers:

Feeds: The Indian Potash does production and marketing of cattle feed in northern & southern parts of the country. They have two plants - one at Sikandrabad (Utter Pradesh) and another at Renugunta (Andhra Pradesh) to meet the requirement of states in northern and southern India. Cattle feeds help the milk capacity and help in healthier calving.

Dairy: With State-of-art plant. Indian Potash processes 7 lakh liter of the milk on a daily basis.Indian Potash supplies milk and dairy products to Mother Dairy and also sold under their own brand.

Sugar: In 2010, to increase the portfolio base of products, the Indian Potash had acquired five very old sugar factories from the U.P. Government with the overall capacity of app. 9700 TCD. Indian Potash also makes pharma grade sugar and supply to global pharmaceuticals companies such as GSK, and Abbot. They also supplied sugar for Food and Beverages Industries and services to clients such as Coke, Pepsi, Cadbury, and Nestle.

Precious Metals: The Indian Potash in collaboration with state-owned trading firm MMTC runs a jewelry showroom, "IPL Swarnalaya" in New Delhi. The showroom deals in jewelry, medallions, and MMTC''s silver jewelry brand, "Sanchi". Subsidiaries of Indian Potash Limited

UnlistedZone Review 2019-20 :

1. The company has grown revenue at CAGR of 8% in the last 4 years- Moderate Growth.

2. The company has grown at PAT at CAGR of 1% in the last 4 years- Poor Growth.

3. Debt/Equity has come down from 2.16x in 2016 to 0.98 in 2020. A decrease in debt for any company is a positive sign- Positive Sign

4. The receivables days have improved from 150 days to 136 days in the last 4 years -Positive Sign

5. Current Ratio in the balance sheet is quite manageable. So, we can conclude that the balance sheet is strong.

6. Cash is king in the business. As an analyst, we are more concerned about Free cash rather than PAT, and Indian Potash has generated ~3300 Cr of free cash in the last 4 years - Excellent

7. Indian Potash has an average ROCE of ~25% in the last 4 years- Excellent

Valuation:

(i) Current Unlisted Market Price (24.07.2023) = 1500

(ii) Mcap= ~4200Cr. The company has a revenue of 33000 cr; that means the Indian Potash is available at Mcap/sales of 0.12( anything below 2 is undervalued).

(iii) EPS(2021)= 675 (iv) P/E = 2 ( highly undervalued) We can conclude that on the basis of market relative parameter i.e. P/E and Mcap/Sales, the Indian Potash is a quite undervalued stock.