Gopal Snacks Limited IPO Analysis: The IPO of Gopal Snacks Limited is scheduled to open for subscription from March 6, 2024, to March 11, 2024. This IPO adopts a Book Built Issue model. The price range for the Gopal Snacks Limited IPO is set between ₹381 to ₹401 per share. The total issue size of this IPO is Rs. 650.00 Cr. The company has allocated 50% for institutional investors, 15% for non-institutional investors, and 35% for retail investors.
About Gopal Snacks Limited
Established in 1999, Gopal Snacks Limited is a notable FMCG company that distributes a variety of snacks and other products across ten States and two Union Territories in India.
Operating under the brand name ‘Gopal’, the company offers a wide range of savory items, including traditional delicacies like namkeen and gathiya, as well as western snacks such as wafers, extruded snacks, and snack pellets. It also provides fast-moving consumer goods such as papad, spices, gram flour (besan), noodles, rusk, and soan papdi, with a diverse product lineup of 276 SKUs across 84 different categories.
Catering to a broad spectrum of tastes, Gopal Snacks achieves sales of 8.01 million packets per day across 533 locations in India. Its distribution network includes three depots and 617 distributors, supported by a dedicated sales and marketing team of 741 employees as of September 30, 2023. The company also maintains a fleet of 263 logistics vehicles to facilitate distribution operations.
Gopal Snacks operates six manufacturing facilities, including three primary facilities located in Nagpur, Maharashtra; Rajkot, Gujarat; and Modasa, Gujarat, along with three ancillary facilities, two in Rajkot, Gujarat, and one in Modasa, Gujarat. As of September 30, 2023, the combined annual installed capacity of these facilities was 404,728.76 metric tons, with primary facilities contributing 303,668.76 metric tons and ancillary facilities contributing 101,060.00 metric tons. Additionally, the company has a cold storage unit within its primary manufacturing facility in Modasa, Gujarat, with a capacity of 40,000 metric tons as of September 30, 2023.
Industry Overview
The Indian packaged food industry has witnessed notable expansion, surging to a valuation of INR 4,62,200 crore in 2023 and anticipated to reach INR 6,76,700 crore by 2027. Among its segments, savory snacks, encompassing both western and ethnic varieties, stands out, expected to grow at an 11% CAGR through 2027.
Factors fueling this growth include increasing disposable incomes, evolving consumer preferences post-COVID-19, and India’s robust economic advancement. Although operating in a competitive arena alongside giants like PepsiCo and Haldiram’s, Gopal Snacks maintains a robust market presence through its brand recognition, innovative approach, and customer-centric strategies.
Financial Highlights
In contrast to the preceding fiscal year, Gopal Snacks Limited has experienced growth in total assets, net worth, and total revenue. Additionally, there has been an uptick in profit after tax, accompanied by a reduction in total borrowings.
| Amount in Crores | |||
| Period | 30 Sept 2023 | 31 Mar 2023 | 31 Mar 2022 |
| Total Assets | 434.54 | 461.28 | 399.72 |
| Total Revenue | 677.97 | 1,398.54 | 1,356.48 |
| PAT | 55.57 | 112.37 | 41.54 |
| Net Worth | 346.10 | 290.88 | 177.66 |
| Reserve & Surplus | 333.17 | 277.60 | 176.56 |
| Total Borrowings | 26.05 | 106.37 | 164.12 |
Competitors
| Name of the Company | Face Value (Rs) | EPS (Rs) | P/E Ratio |
| Gopal Snacks Limited | 1 | 9.02 | – |
| Bikaji Foods International Limited | 1 | 5.14 | 104.67 |
| Prataap Snacks Limited | 5 | 8.51 | 137.87 |
Strengths
- Established as a key player in India’s snack food industry, Gopal Snacks specializes in ethnic savories, particularly renowned in Gujarat, building brand recognition through quality and diverse offerings.
- With a diverse product lineup, Gopal Snacks is well-positioned to capitalize on the growing Indian snacks market.
- As a prominent gathiya manufacturer in India, Gopal Snacks taps into the rising demand for gathiya snacks, driving growth in this segment.
- Strategically located manufacturing facilities optimize operations and boost efficiency.
- With vertically integrated operations, Gopal Snacks ensures high product quality and cost-effective processes.
- Supported by a robust distribution network, Gopal Snacks effectively reaches its target markets.
- Gopal Snacks has a proven track record in promotion and efficient management, leading to profitable financial results.
Weaknesses
- Eight notices have been received by the company under the Food Safety and Standards Act, 2006.
- Business operations are subject to seasonal fluctuations, with revenue expected to decrease during non-festive periods and school summer breaks, potentially affecting performance.
- Competition in the market poses a risk, with increased competition potentially having adverse effects on the company.
- Revenue from operations, EBITDA, EBITDA margins, PAT, and PAT margins may decrease in the future due to various factors.
- The Company, its Promoters, and Directors are or may be involved in certain legal and regulatory proceedings.
- Non-compliance with food safety laws, environmental regulations, and other applicable regulations concerning manufacturing facilities could have negative consequences for the business.
Key IPO Information
| IPO opening & closing date | March 6, 2024 to March 11, 2024 |
| Face Value | Rs 1 per share |
| Issue Price | Rs 381 to Rs 401 per share |
| Lot Size | 37 Shares |
| Price of 1 lot | Rs 14,837 |
| Issue Size | 16,209,476 shares (aggregating up to Rs 650.00 Cr) |
| Offer for Sale | 16,209,476 shares of Rs 1 (aggregating up to Rs 650.00 Cr) |
| Employee Discount Rs 38 per share | Employee Discount Rs 38 per share |
| Listing at | BSE, NSE |
| Issue Type | Book Built Issue IPO |
| Registrar | Link Inktime India Pvt. Ltd. |
Promoters and Management: Bipinbhai Vithalbhai Hadvani, Dakshaben Bipinbhai Hadvani, Gopal Agriproducts
| Pre-issue Promoter Shareholding | 93.50% |
| Post-issue Promoter Shareholding |
Conclusion
Gopal Snacks Limited, a notable FMCG brand, has a robust distribution network and offers a wide range of products to a significant consumer base. While the company has shown satisfactory financial performance, prospective investors should thoroughly assess all relevant factors, including the issue price, before participating in the IPO to achieve optimal results.
