Gopal Snacks IPO Debuts in Market, Lists at 12.5% Discount

Gopal Snacks Makes tepid Debut

Gopal Snacks IPO made a tepid debut on the bourses today. On National Stock Exchange, its share price opened at ₹351 per share marking a 12.47% drop from the issue price of ₹401. On Bombay Stock Exchange, Gopal Snacks started trading at ₹350 down 12.72% from the issue price of ₹401. Experts had anticipated the share price to list in the range of ₹370 to ₹392. Prior to the listing, the company's shares were trading at a discount of ₹25 in the unlisted market. This unofficial ecosystem known as the grey market facilitates trading of shares before IPO allotment and up until the listing day. Many investors monitor the unlisted market to get an idea of potential listing price. Analysts believe the subdued listing is reasonable because the entire offer was a sale of existing shares, with no new funds raised for company expansion.

Gopal Snacks IPO Subscription and IPO Details

As per the BSE data, Gopal Snacks IPO subscription status was 9.02 times on the third day. Retail investors portion was subscribed 4.01 times, non institutional investors portion was booked 9.50 times and the Qualified Institutional Buyers portion was oversubscribed by 17.50 times. The employee portion was subscribed 6.87 times.

Read Gopal Snacks IPO (Gopal Namkeen) Subscribed 9.02 times

The IPO reserved not more than 50% of the shares for QIBs, not less than 15% for NIIs and not less than 35% for retail investors. A total of ₹3.5 crore worth of reserved equity shares constituted the employee portion. Eligible employees were given a discount of ₹38 per share. The price range for each share, with a face value of ₹1, was set between ₹381 and ₹401. The lot size for Gopal Snacks IPO was 37 equity shares and in multiples of 37 equity shares thereafter.

Gopal Snacks IPO opened for retail subscription on 6 March and closed on 11 March, priced between ₹381 to ₹401 per share, the IPO consists entirely of an offer for sale by promoters and existing investors. Gopal Snacks has already secured ₹193.9 crore from anchor investors.

About Gopal Snacks Ltd

Gopal Snacks Limited, established in 2009, specializes in selling a variety of ethnic and western snacks under the 'Gopal' brand across ten states and two union territories. Their product range includes wafers, gathiya, namkeen, and more, totaling 84 products with 276 stock-keeping units (SKUs) as of September 30, 2023.

The company operates six manufacturing facilities in Gujarat and Maharashtra, with a combined annual capacity of 404,729 metric tonnes (MT). Additionally, Gopal Snacks collaborates with third party manufacturers for products like nachos, noodles, chikki, soan papdi and rusk as required. As of Q2 FY24, Gopal Snacks has 617 distributors, 3 depots, 741 sales and marketing staff, and 263 logistics vehicles.

In terms of financial performance, between FY21 and FY23, the company's revenue from operations grew at a CAGR of over 7%, while profit surged by 74%. However, between Q2 FY23 and Q2 FY24, revenue declined at a CAGR of 3%, while profit increased by 6%.

Also Read about Gopal Snacks IPO

To Summarize

Despite the subdued start, investors will closely monitor Gopal Snacks' performance in the coming months. According to the company's IPO prospectus, the Indian savoury snacks market is expected to expand at a CAGR of nearly 11% from FY23 to FY27, presenting potential growth opportunities for Gopal Snacks.