Ahead of the issue opening, the Rajkot-based company has garnered Rs 194 crore from anchor investors.
Gopal Snacks IPO review
Analysts are mixed on the IPO over the competition in the industry and over reliance on specific product categories and regions.
“At the upper price band, the issue is valued at an EV/EBITDA of 25.9x based on FY23 earnings, which we think is expensive and recommend Avoid for this issue,” said Arihant Capital.
Meanwhile, Anand Rathi gave a subscribe recommendation as it sees the valuations as fair.
“Gopal Snacks will be focusing on geographical markets which are close to existing manufacturing facilities. Therefore, this move will not only enable them to increase their top line growth but will also rationalize its operating expenses. We believe that valuations of the company are fairly priced and recommend a Subscribe-Long Term rating to the IPO,” it said.Gopal Snacks IPO. 10 things to know before subscribing to the issue
Gopal Snacks IPO price band
Gopal Snacks has fixed a price band of Rs 381-401 per share for its maiden public offer. Investors can bid for 37 shares in one lot and in multiples thereafter.
About 50% of the offer will be available for qualified institutional investors for reservation, 35% for retail investors and 15% for non-institutional investors.
Other details
Gopal Snacks a fast-moving consumer goods (FMCG) company in India with a major presence in Gujarat, offering a wide variety of savoury products under its brand ‘Gopal’, including ethnic snacks such as namkeen and gathiya, western snacks such as wafers, snack pellets and extruder snacks.
As of September 2023, its product portfolio comprised 84 products with 276 SKUs across our various product categories. The company operates six manufacturing facilities comprising three primary manufacturing facilities and three ancillary manufacturing facilities in India.
The three primary manufacturing facilities are located at Nagpur, Rajkot and Modasa and these facilities primarily focus on the manufacturing of the company’s finished products.
The three ancillary manufacturing facilities primarily focus on producing besan or gram flour, raw snack pellets, seasoning and spices which are primarily used for captive consumption in the manufacturing of finished products.
For the six months ended September 2023, revenue from operations fell 3% year-on-year to Rs 676 crore. Profit after tax during the same period increased marginally to Rs 55.5 crore from Rs 51.9 crore in the last year period.
Intensive Fiscal Services, Axis Capital, and JM Financial are the book-running lead managers, and Link Intime India is the registrar of the offer.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)