Unlisted shares of Gopal Snacks Ltd are trading Rs 24 higher in the grey market, expecting a 5.99 per cent listing gain from the public issue
Gopal Snacks IPO: The initial public offering of namkeen and wafer maker Gopal Snacks Ltd, which is going to be closed on Monday, March 11, has seen a bleak response from investors so far. The IPO till 11:03 am on the final day of bidding on Monday, has received 1.98 times subscription garnering bids for 2,25,09,579 shares as against 1,13,81,955 shares on offer.
The Gopal Snacks IPO was opened for public subscription on March 6. The price band of the Rs 650-crore IPO has been fixed at Rs 381-401 apiece.
The retail quota has received 2.79 times subscription, while the non-institutional investor (NII) category has been subscribed 2.46 times. The QIB category received 0.11 times subscription.
The allotment of the Gopal Snacks IPO will take place on March 12, while its listing will take place on both NSE and BSE on March 14, 2024.
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Gopal Snacks IPO GMP Today
According to market observers, unlisted shares of Gopal Snacks Ltd are trading Rs 24 higher in the grey market as compared with its issue price. The Rs 24 grey market premium or GMP means the grey market is expecting a 5.99 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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Gopal Snacks IPO: Should You Subscribe?
Assigning the ‘Subscribe-Long Term’ rating, brokerage Anand Rathi in its IPO note said, “At the upper price band of Rs 401, GSL is available at a P/E of 45x (FY23 EPS), which appears to be fully priced. Considering its strong topline and bottom line growth, emphasis on improving market presence, vertically integrated manufacturing facilities, lean balance sheet, healthy return ratios and promising industry outlook, we assign a ‘Subscribe’ rating on a medium to long term basis.”
Advising investors to invest in this IPO with a medium to long-term perspective, Mastertrust in its note said, “Gopal Snacks offers a diverse selection of quality products that strive to capture the Indian taste under the ‘Gopal’ brand. The company’s brand recognition allows it to stand out in the competitive market as evident from its market position.”
It said the company plans to leverage technology to further optimise operations and utilise its unutilised capacity and expand manufacturing capacity at existing facilities and set up additional strategically located facilitiesto launch new products, expand wallet share with consumers and grow its consumer base to enhance brand awareness. “Investors looking to invest can invest in this IPO with a medium to long-term perspective.”
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Gopal Snacks IPO Details
Rajkot-based Gopal Snacks’ proposed issue is entirely an offer for sale (OFS) of equity shares by promoters and other existing shareholders. The OFS comprises the sale of shares by Bipinbhai Vithalbhai Hadvani, Gopal Agriproducts Private Ltd and Harsh Sureshkumar Shah.
Gopal Snacks garnered Rs 194 crore from anchor investors on Tuesday, a day ahead of the start of its initial share sale.
Founded in 1999, Gopal Snacks is a fast-moving consumer goods company, offering namkeen, western snacks, and other products across India and internationally. As on September 2023, the namkeen makers’ products were sold in 10 states and 2 Union Territories and has a network of 3 depots and 617 distributors.
The company operates three manufacturing facilities — Rajkot and Modasa in Gujarat, and Nagpur in Maharashtra. Furthermore, it runs three ancillary manufacturing facilities that mostly produce besan, raw snack pellets, seasoning, and spices. These are mainly used internally to make finished products like namkeen, gathiya, and snack pellets. The companies’ revenue from operations increased from Rs 1,128.86 crore in fiscal 2021 to Rs 1,394.65 crore in fiscal 2023 and profit grew from Rs 21.12 crore in fiscal 2021 to Rs 112.37 crore in fiscal 2023.
Half of the issue size has been reserved for qualified institutional investors, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors. Investors can place bids starting from a minimum of 37 equity shares, with the option to bid in increments of 37 equity shares thereafter.
Intensive Fiscal Services, Axis Capital and JM Financial are the book-running lead managers to the IPO. The equity shares of the company are proposed to be listed on the BSE and NSE.
