Continuing the trend of weak listings in the recent past, Gopal Snacks, the manufacturer of popular snack items, made another disappointing debut on the exchanges on Thursday.

For context, three out of the last four D-Street debuts have been in the negative and even the positive debut of Bharat Highways was just 3% above the offer price.

The shares of Gopal Snacks listed at Rs 352 per share, which translates to a loss of around 13% compared to its issue price of Rs 401.

Analysts said the negative debut falls short of pre-listing expectations and raises concerns about investor sentiment, valuation, and the company’s growth prospects in the competitive snack food market.

“The IPO price might have been perceived as too high considering the company’s growth trajectory and the competitive landscape. Broader market conditions and investor cautiousness towards food companies might have dampened enthusiasm. Investors are advised to carefully consider their risk tolerance and long-term investment goals before holding onto their shares,” said Shivani Nyati, Head of Wealth at Swastika Investmart.

Despite mixed signals from analysts, the IPO received a steady response with 9 times the subscription on strong interest from institutional and non-institutional investors.Since the IPO is an OFS, the company will not receive any proceeds and the entire funds will go to selling shareholders.Gopal Snacks is a fast-moving consumer goods (FMCG) company in India with a major presence in Gujarat, offering a wide variety of savoury products under its brand ‘Gopal’, including ethnic snacks such as namkeen and gathiya, western snacks such as wafers, snack pellets, and extruder snacks.

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As of September 2023, its product portfolio comprised 84 products with 276 SKUs across our various product categories. The company operates six manufacturing facilities comprising three primary manufacturing facilities and three ancillary manufacturing facilities in India.

The three primary manufacturing facilities are located at Nagpur, Rajkot, and Modasa. These facilities primarily focus on producing besan or gram flour, raw snack pellets, seasoning, and spices which are primarily used for captive consumption in the manufacturing of finished products.

For the six months ended September 2023, revenue from operations fell 3% year-on-year to Rs 676 crore. Profit after tax during the same period increased marginally to Rs 55.5 crore from Rs 51.9 crore in the last year period.

The company recorded an increase in its revenue from operations from Rs 1,129 crore in FY21 to Rs 1,395 crore in FY23, growing at a CAGR of 11.15%. EBITDA for the same period rose at a CAGR of 80% to Rs 196 crore in FY23.

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