Oct 10 Shares in rice trader Amira Nature Foods
Ltd closed 4 percent lower in their market debut on
Wednesday, even after the company cut the price at which it sold
The Dubai-based seller of packaged Indian specialty rice
priced its $90 million initial public offering at $10 per share,
below its previously projected price range of $13-$15 per share.
The IPO cuts the ownership of Dubai-based chairman and CEO,
Karan Chanana, to around two-thirds from full ownership,
according to a company filing. ()
Amira Nature Foods would then own around 85 percent of the
group's main operating company, Amira India, with Chanana and
affiliates owning the rest, it said.
The structure of the company raised concerns about
accountability, said IPO Desktop.com analyst Francis Gaskins.
Such structures are common among Chinese companies looking
to list themselves on U.S. exchanges, a reason why Chinese IPOs
lack investor confidence, he said.
Company spokespeople were not immediately available for
Amira sells packaged Indian specialty rice in over 40
countries with most of its revenue coming from sales of premium
Indian basmati rice.
Amira sells its products through retailers such as Carrefour
SA, Costco and India's Big Bazaar.
The company posted an after-tax profit of $11.9 million from
revenue of $329 million for the fiscal year 2012, with
two-thirds coming from sales outside of India.
It said it planned to use the proceeds from the share sale
to build a new processing facility and pay down debt.
UBS Investment Bank and Deutsche Bank Securities were lead
underwriters for the Amira offering.
The stock was among the most traded on the New York Stock
Exchange with more than 3.5 million changing hands in the first
The lackluster debut follows the successful listing of
organic food companies Annie Inc and Natural Grocers by
Vitamin Cottage Inc.
Both stocks have risen by more than a quarter since their
listings earlier this year.
Shares of the company closed at $9.58 on the New York Stock
Exchange after trading flat for most of the day.