Gopal Snacks' disappointing listing at a 13% discount to IPO price

On Thursday, March 14, Gopal Snacks had a disappointing debut on the stock exchanges, with its shares opening at a significant discount of nearly 13 percent compared to the issue price.

The stock commenced trading at Rs 350 on the BSE, falling short of the issue price of Rs 401, which represented a discount of 12.7 percent. Similarly, on the NSE, the stock was listed at Rs 351, marking a 12.47 percent drop.

Before the listing, Gopal Snacks Limited did not exhibit any grey market premium (GMP) but was trading at a discount of Rs 25 in the grey market.

During its initial public offering (IPO) from March 6 to March 11, the company witnessed moderate interest from investors, with subscriptions exceeding nine times the offer size. Qualified institutional bidders (QIBs) subscribed to the quota by 17.50 times, while non-institutional investors subscribed by 9.50 times. Retail investors and employees also showed interest, with bids reaching 4.01 times and 6.88 times, respectively.

The IPO of Gopal Snacks offered its shares in the price range of Rs 381 to Rs 401 per equity share, aiming to raise approximately Rs 650 crore through the public offer. The IPO comprised solely of an offer for sale, with promoters and other stakeholders offloading their shares. Promoters currently hold a 93.5 percent stake in the company, leaving only 6.5 percent for public shareholders, including Axis Growth Avenues AIF – I and Ashoka India Equity Investment Trust Plc.

Intensive Fiscal Services, Axis Capital, and JM Financial served as the book-running lead managers for the IPO, while Link Intime India acted as the registrar.

Gopal Snacks, a leading FMCG company in India, specializes in ethnic and Western snacks and operates in 10 states and two Union Territories. Its flagship brand 'Gopal' offers a variety of savory products, holding a prominent position in the snack market, especially in Gujarat, where it is the second-largest snack manufacturer.

In terms of revenue, the company witnessed a slight decline in the first six months of fiscal 2023, with operations revenue dropping by 3 percent year-on-year to Rs 676 crore. However, its profit after tax during the same period increased marginally to Rs 55.5 crore from Rs 51.9 crore in the previous year.

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