ziNUZIVEEDU SEEDS LIMITED - MarketResearch · 8. Macro Analysis of Seed Industry 8.1. Indian Hybrid Seed Industry Market Size, FY’2008-FY’2012 8.2. Indian Hybrid Seed Industry

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ziNUZIVEEDU SEEDS LIMITED

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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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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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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


Inbound Acquisition

Blackstone GPV Capital Partners Mauritius V-C Limited

Yaaganti Seeds Private Limited and Pravardhan Seeds Private Limited




Inbound Acquisition

Blackstone GPV Capital Partners Mauritius V-C Limited

Note: LTM stands for last twelve month from the date of acquisition

https://www.capitaliq.com/ciqdotnet/company.aspx?companyId=52520747�





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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


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24-Apr-12 Zero Waste Agro Organics Private Limited


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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ziNUZIVEEDU SEEDS LIMITED - MarketResearch · 8. Macro Analysis of Seed Industry 8.1. Indian Hybrid Seed Industry Market Size, FY’2008-FY’2012 8.2. Indian Hybrid Seed Industry