Gopal Snacks Limited IPO - Get Date, Price, Review and Details
| Issue Open | Mar, 6 2024 | Listing At | BSE, NSE |
| Issues Close | Mar, 11 2024 | Issue Size | ₹ 650.00 Cr |
| Issue Type | Book Built Issue IPO | Allotment Details | Mar, 12 2024 |
| Lot Size | 37 Shares | Refunds | Mar, 13 2024 |
| Face Value | ₹1 per share | Credit of Shares to Demat | Mar, 13 2024 |
| Price Band | ₹ 381 to ₹ 401 per share | Cut off time for UPI Mandate Confirmation | Mar, 11 2024 5:00 Pm |
In this article, we will discuss:
Business Overview:
Established as a partnership firm in 1999 and subsequently incorporated as a company in 2009, it is a FMCG company in India, offering ethnic snacks such as namkeen and gathiya, western snacks such as wafers and pellets, and other products like papad, spices, gram flour, etc., in 10 States and 2 Union Territories as of September 30, 2023.
It has 6 facilities for manufacturing 84 variants with an installed capacity of 979 MT and employs nearly 3303 people and so on.
Objects of the Issue:
Since this is an OFS none of the IPO proceeds are credited to the company’s account.
Risks:
- Geographically concentrated revenues: It derives 76.49% of revenues from Gujarat. Any adverse developments in this region would significantly impact the company's business.
- Capacity Utilization: Its manufacturing facilities are highly underutilized (27.56% in fiscal 2023) posing a question on the efficiencies
- Seasonality in business: Apart from festive seasons and summer vacations, revenues would reduce/fluctuate.
- High Competition: Competition from existing large players and unorganized players would force the company to lower its prices resulting in contraction of margins.
- If inflation were to rise in India, the company might not be able to increase the prices of the products at a proportional rate to pass costs on to the consumers thereby reducing our margins.
Strengths:
- Diversified product portfolio capable of capturing the growing Indian snacks market.
- Strategically located and well-planned 3 ancillary and 3 primary manufacturing facilities.
- A strong distribution network with 617 distributors, supported by 741 employees of a dedicated sales and marketing team as of 30 th Sept 2023. Further, to smoothen the supply chain and on-time delivery the company owns 63 logistic vehicles.
- Experienced promoter and management team at every level of operations.
Financial Snapshot:
| Particulars | FY23 | FY22 | FY21 |
| Revenue from Operations | 1395 | 1352 | 1129 |
| YoY Growth | 3% | 20% | |
| EBITDA | 196 | 95 | 60 |
| YoY Growth | 106% | 58% | |
| EBITDA Margin | 14% | 3.07% | 5.35% |
| PAT | 112 | 41 | 21 |
| YoY Growth | 173% | 95% | |
| PAT Margin | 8.06% | 3.07% | 1.87% |
| RoCE | 43% | 18.70% | 13.50% |
| RoE | 38.60% | 23.40% | 15.60% |
Revenues for the period H1FY24 stood at Rs. 676 crs, EBITDA – Rs. 94.2 crs, PAT – Rs. 55.5 crs, EBITDA Margin – 13.94%, and PAT Margin – 8.22%.
Conclusion:
India’s per capita GDP has risen consistently, India transitioned from a low-income to a lower middle-income nation and could potentially become an upper middle-income country by 2047.
The retail market size in India is expected to grow at 8.7% CAGR till 2027 further, the Indian Savoury Snack market is expected to grow at 11% CAGR in the same period.
This company when compared with its listed peers namely Prataap Snacks and Bikaji Foods which are trading at a very high PE’s of 128 and 67.6, Gopal Snacks with ~45 earnings valuations seems to be fairly priced.
Considering the company's financial performance, associated risks, valuations, and future outlook.