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© This is a licensed product of Ken Research and should not be copied
ziNUZIVEEDU SEEDS LIMITED
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© This is a licensed product of Ken Research and should not be copied
TABLE OF CONTENTS
1. Executive Summary
2. Business Overview
Introduction
Expertise
Products
Awards
2.1. Corporate Timeline
2.2. Major Investments in Company Evolution
2.3. Organizational Structure
2.4. Business Model
3. Product Portfolio
3.1. Hybrid Cotton Seeds
3.2. Field Crop Seeds
3.3. Vegetable Seeds
4. Nuziveedu Seeds Limited Financial and Valuation Analysis
4.1. Valuation Analysis and Financial Summary
5. Nuziveedu Seeds Limited Analyst Recommendations
Expected Change in Capital Structure
Planning for Collaborations with State Governments
Robust Varieties of Hybrid Paddy and Hybrid Maize of the Company
6. Nuziveedu Seeds Limited SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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7. Nuziveedu Seeds Limited Key Professionals
7.1. Management Profile on the Basis of Key Board Members
8. Macro Analysis of Seed Industry
8.1. Indian Hybrid Seed Industry Market Size, FY’2008-FY’2012
8.2. Indian Hybrid Seed Industry Segmentations, FY’2012
By Type of Crops
8.3. Market Share of Major Players in the Indian Hybrid Seed Industry, FY’2012
8.3.1. By Hybrid Cotton
8.3.2. By Hybrid Field Crop Seed
8.3.3. By Hybrid Vegetable Crop Seeds
9. Nuziveedu Seeds Limited Competitive Analysis
9.1. By Products Offered/ Revenue/ Business Strategy
10. Nuziveedu Seeds Limited Management Outlook and Future Projections
10.1. Future Projections
11. Appendix
11.1. Market Definitions
11.2. Abbreviations
11.3. Research Methodology
Data Collection Methods
Approach
Non-Linear Factor Based Regression Model
11.4. Disclaimer
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© This is a licensed product of Ken Research and should not be copied
LIST OF FIGURES
Figure 1: Nuziveedu Seeds Limited Corporate Timeline 1973-2013
Figure 2: Nuziveedu Seeds Limited Organizational Structure
Figure 3: Nuziveedu Seeds Limited Business Model
Figure 4: Nuziveedu Seeds Limited Product Portfolio
Figure 5: Nuziveedu Seeds Limited Financial Performance on the Basis of Revenues, EBITDA and PAT in INR Crore, FY’2008-FY’2012
Figure 6: India Hybrid Seed Industry Market Size and Contribution in the Overall Indian Seed Market on the Basis of Revenue in INR Crore and Percentage, FY’2008-FY’2012
Figure 7: India Hybrid Seed Industry Segmentation on the Basis of Contribution in the Overall Hybrid Seed Industry in Percentage, FY’2012
Figure 8 : Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY’2012
Figure 9: Market Share of Major Players in Indian Hybrid Cotton Seed Market on the Basis of Contribution in the Overall Revenue in Percentage, FY’2012
Figure 10: Market Share of Major Players in Indian Hybrid Corn Seed Market on the Basis of Contribution in the Overall Revenue in Percentage, FY’2012
Figure 11: Market Share of Major Players in Indian Pearl Millet Seed Market on the Basis of Contribution in the Overall Revenue in Percentage, FY’2012
Figure 12: Market Share of Major Players in Indian Paddy Seed Market on the Basis of Contribution in the Overall Revenue in Percentage, FY’2012
Figure 13: Nuziveedu Seeds Limited Financial Performance on the Basis of Revenues, EBITDA Margin and PAT Margin in INR Crore, FY’2008-FY’2012
Figure 14: Scatter Chart of Indian Hybrid Seed Industry Market Size with the Company’s Revenue, FY’2008-FY’2012
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© This is a licensed product of Ken Research and should not be copied
LIST OF TABLES
Table 1: Nuziveedu Seeds Limited Financial Summary on the Basis of Revenue, Growth of revenue and EBITDA Margin in INR Crore and Percentage, FY’2008-FY’2012
Table 2: Nuziveedu Seeds Limited Major Investments in Company Evaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INR Crore
Table 3: Nuziveedu Seeds Limited subsidiary companies and their profile description
Table 4: Nuziveedu Seeds Limited Revenue Segmentation by Types of Crops Seeds in Percentage, FY’2010-FY’2012
Table 5: Nuziveedu Seeds Limited Products Offered in Hybrid Cotton Seeds on the Basis of Breeding Features
Table 6: Nuziveedu Seeds Limited Products Offered on the Basis of Different Field Crop Seeds, Breeding Features and Price
Table 7: Nuziveedu Seeds Limited Products Offered on the Basis of Different Vegetable Seed Crops and Price Range
Table 8: Nuziveedu Seeds Limited Products Offered on the Basis of Different Vegetable Seed Crops and Breeding Features
Table 9: Company Comparables on the Basis of Revenue in INR Crore, FY’2008-LTM year ending 31st December 2012
Table 10: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
Table 11: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Table 12: Nuziveedu Seeds Limited Operational Overview on the Basis of Board of Directors Profile
Table 13: Competitive Landscape of Major Players (Nuziveedu Seeds, JK Agri Genetics, Advanta, Monsanto, Kaveri Seeds, Nath Seeds) on the Basis of Services Offered, Revenue and Business Strategies, Production Plants
Table 14: Regression Coefficients of the Nuziveedu Seeds Limited
Table 15: Regression Intercepts of the Nuziveedu Seeds Limited
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EXECUTIVE SUMMARY
Date: 22nd April 2013
Nuziveedu Seeds Limited is operating under conglomerate of NSL Group. As a whole, NSL Group comprises of various businesses covering cotton, power, seeds, infrastructure, sugar and textiles. It is a privately owned agronomic company in Indian seed market and is headquartered in Hyderabad, Andhra Pradesh. The company is one of the premieres in the production of hybrid cotton seed products in the Indian hybrid seed market. The company has a prime focus in research and development, production, processes, marketing and distribution of various hybrid seeds such as cotton seeds, other field crop seeds such as maize, paddy, sorghum, pearl millet, sunflower and number of vegetable crop seeds.
Key Differentiators
Nuziveedu is amongst the 30 companies of India holding licenses of Bt. cotton technology unlike Mahyco who tied- up with Monsanto India Limited for the same purpose
….
Competition and Positioning
Leading position in the Indian hybrid cotton market …
Key Developments
Had launched two growth drivers of cotton hybrid seed products such as Bunny in 1997 and Mallika in 2005 all over the country
…
Financial Summary
Table 1: Nuziveedu Seeds Limited Financial Summary on the Basis of Revenue, Growth of revenue and EBITDA Margin in INR Crore and Percentage, FY’2008-FY’2012
Particulars FY’2008 FY’2009 FY’2010 FY’2011 FY’2012
Revenue
Growth%
EBITDA Margin%
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CORPORATE TIMELINE
In 1973, Sri M Venkatramaiah established Nuziveedu Seeds Limited and named it after his ancestral village Nuziveedu in Andhra Pradesh to overcome the domination of government sector companies in the seed industry. In 1985, the company came up with its first product specific advertisement for promoting its product such as NCS-1. In 2000 the company entered into hybrid seed other cotton by releasing hybrid sorghum. In 2001, with a huge sale of Bunny and Mallika the company crossed the turnover of INR 100 crore.
In 2004, company introduced a new segment of vegetable seeds to amplify its product portfolio. In 2005, company entered the hybrid cotton seed market by launching Bt. Mallika which was a newer version of cotton as it combined the bio technology to develop hybrids with desirable qualities….
MAJOR INVESTMENTS IN COMPANY EVOLUTION
In 2011, the company acquired a strong player of cotton hybrid seeds named as Prabhat Agri Biotech Limited so as to absorb its competitor…
In August 2010, by the means of convertible instruments Blackstone GPV Capital Partners Mauritius V-C Limited invested INR ~ crore in the company…
In January 2009, the company acquired Yaaganti Seeds Private Limited and Pravardhan Seeds Private Limited which are primarily focusing on maize, sunflower and bajra seeds among others…
In December 2008, Blackstone invested INR ~ crore in the company so as to increase company’s expansion horizons through mergers and acquisitions.
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Table 2: Nuziveedu Seeds Limited Major Investments in Company Evaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INR Crore
Announced Date
Target Deal Type Acquirer Stake %
Deal Value (INR
Crore)
Implied EV (INR
Crore)
LTM Target
Revenue (INR
Crore)
Prabhat Agri Biotech Limited
Domestic Acquisition
Nuziveedu Seeds Limited
Nuziveedu Seeds Limited
Inbound Acquisition
Blackstone GPV Capital Partners Mauritius V-C Limited
Yaaganti Seeds Private Limited and Pravardhan Seeds Private Limited
Domestic Acquisition
Nuziveedu Seeds Limited
Nuziveedu Seeds Limited
Inbound Acquisition
Blackstone GPV Capital Partners Mauritius V-C Limited
Note: LTM stands for last twelve month from the date of acquisition
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ORGANIZATIONAL STRUCTURE
The company has several seeds processing plants and production facilities plants situated all over the country covering ~ square feet of land. Currently the total processing capacity of the company is ~ TPH, out of which the highest capacity of processing plant with ~ TPH is located at Kothur, Andhra Pradesh…
Figure: Nuziveedu Seeds Limited Organizational Structure
PRODUCT PORTFOLIO
The company has a product portfolio of approximately ~ hybrid seed products in various crop species offering wide range of hybrid cotton, field crops, oilseeds and vegetable crops seeds…
Having cotton hybrid seeds as its mainstay, the company is also focusing on corn, rice and vegetable seed products for providing more qualitative products to farmers…
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The company has multi-location trial centers set across the country in different agro- climatic zones to check the product's adaptability with reference to biotic and abiotic stress tolerances and other desirable characters…
The company’s quality check process includes two major assessment tests which are seed testing laboratory and grow out test. Grow out test (GOT) is carried out with well-qualified production staffs for verifying the genetic purity of the product…
Table: Nuziveedu Seeds Limited Revenue Segmentation by Types of Crops Seeds in Percentage, FY’2010-FY’2012
Business Segment FY’2010 FY’2011 FY’2012
Hybrid Cotton
Field crops other than cotton
Vegetable crops seeds
Total
NUZIVEEDU SEEDS LIMITED FINANCIAL AND VALUATION ANALYSIS
VALUATION ANALYSIS AND FINANCIAL SUMMERY
The revenue of the company has shown a CAGR growth of ~ and EBITDA of the company has shown a CAGR growth of ~ from FY’2008-FY’2012…
In FY’2012 the growth in revenue was marked with 46.7% y-o-y with revenue of INR 1,070.0 crore largely because the company has amplified its plant capacity approximately double as against its previous production in hybrid corn seeds. Moreover…..
Average annual growth in EBITDA of the company from FY’2010 to FY’2012 has grown at a rate of ~ with a ~ growth in EBITDA in FY’2012 which represents the improvement in company’s operational efficiency…
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On the basis of precedent transactions, Nuziveedu Seeds has been valued at INR 2161.3 crore with a revenue multiple of 2.0x. For the calculation of revenue multiple we have considered the deals that have happened since 2007-2013 in the Indian seed and agriculture industry.
Figure: Nuziveedu Seeds Limited Financial Performance on the Basis of Revenues, EBITDA and PAT in INR Crore, FY’2008-FY’2012
Table: Company Comparables on the Basis of Revenue in INR Crore, FY’2008-LTM year ending 31st December 2012
Revenue (in INR Crore) FY’2008 FY’2009 FY’2010 FY’2011 FY’2012 LTM
JK Agri Genetics Ltd.*
Advanta India Limited**
Monsanto India Ltd.
Kaveri Seeds Company Limited
Nath Seeds India Limited
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
2008 2009 2010 2011 2012
INR
Cro
re
Revenue EBITDA PAT
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Table: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
(INR crore, unless Stated) Last Twelve Months (LTM) Year Ending December 2012
Company Market Cap
Net Debt
Enterprise Value (EV)
EV/Revenue EV/EBITDA P/E
Kaveri Seeds Company Limited
JK Agri Genetics Ltd
Advanta India
Nath Seeds Limited
Monsanto India Ltd
Mean
Median
Table: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Date Target Company Deal Type Deal Value
INR (Cr)
Stake %
Implied EV/
Revenue
Implied EV/
EBITDA
Implied EV/
PAT
14-Mar-13
Bisco Bio Sciences Private Limited
Inbound Acquisition
21-Feb-13 R J Biotech Limited IPO
24-Nov-12 Century Seeds Private Limited
Inbound Acquisition
26-Jul-12 Advanta India Limited
Inbound Acquisition
21-May-12 Bisco Bio Sciences Private Limited
Inbound Acquisition
14-May-12 NaanDanJain Irrigation Limited
Domestic Acquisition
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24-Apr-12 Zero Waste Agro Organics Private Limited
Domestic Acquisition
Mean
Median
MACRO ANALYSIS OF SEED INDUSTRY
MARKET SHARE OF MAJOR PLAYERS IN THE INDIAN HYBRID SEED INDUSTRY, FY’2012
The Indian hybrid seed industry is dominated by Nuziveedu Seeds Private Limited. The company has a market share of ~ % in the overall Indian hybrid seed industry followed by Mahyco and Monsanto India limited which have a share of ~% and ~% respectively…
For Monsanto India, corn hybrid seed was the single biggest focus in seed business. Through its Project Golden Rays project the company has signed a public-private partnership with Rajasthan state government for increasing the maize hybrid yields by two folds…
Market Share of Major Players in Indian Hybrid Seed Market on the Basis of Contribution by Revenue in Percentage, FY’2012
Nuziveedu Seeds Private limited
Maharashtra Hybrid Corporation (Mahyco)Monsanto India Limited (MIL)
Rasi Seeds Private Limited
Bayer Crop Science limited - India
Pioneer Seeds
Syngenta India Ltd.
Others
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NUZIVEEDU SEEDS LIMITED COMPETITIVE ANALYSIS
BY PRODUCTS OFFERED/ REVENUE/ BUSINESS STRATEGY
Table: Competitive Landscape of Major Players (Nuziveedu Seeds, JK Agri Genetics, Advanta, Monsanto, Kaveri Seeds, Nath Seeds) on the Basis of Services Offered, Revenue and Business Strategies, Production Plants
Companies Services Offered Key Financials Business Strategies
Number of Production Plants and their Location
Incorporation Date
JK Agri Genetics
Kaveri Seeds
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Nath Seeds
NUZIVEEDU SEEDS LIMITED MANAGEMENT OUTLOOK AND FUTURE PROJECTIONS
The company is planning to increase its geographical reach by entering into the different hybrid seed market of the nations such as northern and eastern region of the country. The company already has a competitive positioning in the hybrid seed market in the southern region of the nation…
FUTURE PROJECTIONS
The company has intensive research and development units which are engaged in research and development of approximately 75 hybrid seeds verities in 160 locations in different parts of the globe. With the acquisition of Prabhat Agri Biotech Limited the company takes the advantage of research…
The company is planning to expand its operation in different continents of the globe so as to increase its brand name across the global in the hybrid seed industry. The company is planning to acquire new production sites in different continents such as SAARC, Sub African countries, Europe and Middle East…
Nuziveedu has a prime focus on the production of hybrid seeds products. The company has a future plan to shift its production from the varietal seeds to the production of hybrid seeds products
The company is expected to showcase a revenue growth at a CAGR of ~% from FY’2012-FY’2017. Nuziveedu is enhancing the production of its hybrid paddy seed such as (HP) Winner – NPH 567…
EBITDA of the company is expected to grow at a CAGR of ~ % from FY’2012-FY’2017 due to increase in the revenue of the company…
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Nuziveedu Seeds Limited Financial Performance on the basis of Revenues, EBITDA Margin and PAT Margin in INR Crore, FY’2008-FY’2012
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
FY'2013 FY'2014 FY'2015 FY'2016 FY'2017
In P
erce
ntag
e
In IN
R C
rore
Revenue EBITDA Margin PAT Margin
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DISCLAIMER
The research reports provided by Ken Research are for the personal information of the authorized recipient and is not for public distribution and should not be reproduced or redistributed without prior permission. You are permitted to print or download extracts from this material for your personal use only. None of this material may be used for any commercial or public use.
The information provided in the research documents is from publicly available data and other sources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect to documents available, neither the company nor any of its employees makes any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use will not infringe privately owned rights.
The report also includes analysis and views expressed by our research team. The research reports are purely for information purposes. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in the research documents and must make investment decisions based on their own investment objectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information.
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