The Initial Public Offering (IPO) of Gopal Snacks, which commenced its subscription phase on March 6, witnessed a moderate reception from investors on the opening day. Despite a lukewarm start, there remains optimism as the IPO will remain open for bids until March 11. The Rajkot-based snack company, known for its wide range of savory snack products under the “Gopal” brand, has successfully attracted attention, albeit with varying degrees of enthusiasm across different investor categories according to the Bombay Stock Exchange (BSE) data.
On its inaugural day, the IPO managed to secure a 56% subscription rate. When dissecting the numbers, a noticeable disparity emerges among the investor segments. Retail investors showed significant interest, with their portion being subscribed to 89%. This contrasts with the Non-Institutional Investors (NII) category, which saw a 49% subscription rate. Interestingly, the Qualified Institutional Buyers (QIB) category was barely touched, while the employee segment witnessed a subscription rate of 1.64 times, highlighting a keen interest from the company’s workforce.
The IPO is marked by its intent to raise ₹193.94 crores through the issuance of shares to anchor investors. Priced between ₹381 to ₹401 per share, with each share having a face value of Re 1, the company has set the minimum bid lot at 37 shares, and further bids must be in multiples of 37 shares. The IPO’s structure allocates a maximum of 50% of the shares to QIBs, a minimum of 15% to NIIs, and at least 35% to retail investors. Additionally, there is an exclusive allocation for employees with equity shares aggregating up to ₹3.5 crore, coupled with a ₹38 discount per share for eligible employees participating in the employee reservation portion.
Gopal Snacks has a diverse product portfolio that caters to a wide range of consumer tastes. The product lineup includes traditional Indian snacks such as namkeen and gathiya, alongside more modern offerings like noodles, rusk, and snack pellets. This variety positions the company well within the fast-moving consumer goods (FMCG) sector, appealing to both traditional and contemporary snack enthusiasts.
The specifics of the IPO’s subscription data further underline the investor response. A total of 66,96,667 shares received bids out of the 1,19,79,993 shares on offer, as per BSE records. Breaking down the numbers: the retail investor segment saw bids for 52,75,719 shares against the 59,38,977 shares allocated, the NII category received bids for 12,47,418 shares out of the 25,45,276 shares available, and QIBs showed nominal interest with bids for only 6,290 shares out of the 33,93,700 shares designated for this segment. The employee category exceeded its share offer, with 1,67,240 shares bid against the 1,02,040 shares available.
Gopal Snacks’ IPO structure also includes an Offer for Sale (OFS) valued at ₹650 crore, with the promoters and other investors offloading shares. This includes significant stakes from Gopal Agriproducts Private Ltd and key figures such as Bipinbhai Vithalbhai Hadvani, alongside other stakeholders like Harsh Sureshkumar Shah. The IPO is managed by a consortium of book running lead managers, including Intensive Fiscal Services Private Limited, Axis Capital Limited, and JM Financial Limited, with Link Intime India Private Ltd serving as the registrar.
An essential aspect to consider is the IPO’s Grey Market Premium (GMP), which as of the latest reports, stood at +51. This figure indicates that Gopal Snacks’ shares are being traded at a premium of ₹51 above the IPO price in the grey market. Taking into account the higher end of the IPO price band and the prevailing grey market premium, the anticipated listing price for Gopal Snacks’ shares could be around ₹452 each. This represents a potential increase of 12.72% over the IPO price of ₹401. The grey market’s response over the last eight sessions suggests a positive outlook for the IPO, with the GMP fluctuating between ₹0 and ₹122. The Grey Market Premium is a telling indicator of the market’s anticipation and willingness to pay a premium over the proposed issue price, reflecting the overall investor sentiment towards the IPO.
In summary, Gopal Snacks’ IPO presents an intriguing investment opportunity within the FMCG sector, especially for those looking to diversify into the burgeoning market of traditional and modern Indian snacks. With its comprehensive product range and strategic pricing, the company is positioned to attract a broad spectrum of investors. While the initial response has been mixed across different investor categories, the coming days will be crucial in determining the overall success of the IPO as it moves closer to its closing date.