Gopal Snacks IPO Shares to Make Stock Market Debut Today; Muted Listing on The Cards

Gopal Snacks IPO Shares to Make Stock Market Debut Today; Muted Listing on The Cards

The Gopal Snacks IPO ran from March 6 to March 11. The company had offered its shares in the price band of Rs 381-401 per share.

Shares of Gopal Snacks are set to make their debut at Dalal Street on Thursday. If the grey market trends were to go by, Gopal Snacks may have a muted stock market listing as the sentiment in the secondary market weakens and a series of disappointing IPO debuts. Ahead of its listing, shares of Gopal Snacks were trading at a discount of Rs 25 per share, suggesting a 6-7 per cent fall at listing. The grey market premium stood at Rs 45-65 a few days ago.

The Gopal Snacks IPO ran between March 6 and March 11. The company had offered its shares in the price band of Rs 381-401 per share. The lot size was 37 shares. The company raised a total of Rs 650 crore from its primary offering, which was entirely an offer-for-sale (OFS) of up to 1,62,09,476 equity shares by its promoters and other shareholders.

While considering subdued secondary market scenario and continued selling pressure in mid & smallcaps, Gopal Snacks may be a victim and listing can be on a flat to muted note, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

The soft listing seems to be justified as the offer was 100 per cent OFS and no funds would be coming into the company for growth, he said.

“We believe this listing gives an opportunity to investors to accumulate the growth story for the long term. Hence, considering all the parameters we recommend allotted investors to ‘hold’ and those investors who missed and wish to add can accumulate Gopal Snack at any dip post listing for long term perspective only,” he said.

The issue was overall subscribed a little more than nine times. The quota for qualified institutional bidders (QIBs) was booked 17.50 times. The quota reserved for non-institutional investors was subscribed 9.50 times. The portions reserved for retail investors and employees saw bidding for 4.01 times and 6.88 times, respectively.

Incorporated in 1999, Gopal Snacks is an FMCG firm specializing in both ethnic and Western snack items, catering to markets in India and worldwide. Their product range encompasses a diverse selection, featuring traditional offerings like namkeen and gathiya alongside contemporary options such as wafers, extruded snacks, and snack pellets.

Gopal Snacks boasts a strong regional presence, particularly in Gujarat, offering a diverse portfolio of popular snack products. The company has also demonstrated growth in its top and bottom lines, said Shivani Nyati, Head of Wealth at Swastika Investmart. However, certain risk factors may be influencing investor sentiment, she said.

“The business is subject to seasonality, with demand potentially fluctuating throughout the year. Additionally, the Indian snacks market is highly competitive, with established players and smaller regional competitors vying for market share. This fierce competition can exert pressure on prices and profitability,” Niyati added.

Brokerage firms were mostly positive on the issue of Gopal Snacks. Intensive Fiscal Services, Axis Capital and JM Financial are the book running lead managers of the Gopal Snacks IPO, while Link Intime India is the registrar for the issue.