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Salient features of the IPO:

• Rajkot based Gopal Snacks Ltd. (GSL), also known as Gopal Namkeen is coming up with an IPO to raise Rs. 650cr, which opens on 6 th Mar. and closes on 11th Mar. 2024. The price band is Rs. 381 - 401 per share.

• The IPO only consists of OFS portion. Thus, the company will not receive any proceeds from the issue.

• During Oct. 2023, one of the promoter & promoter group (P&PG) entities and an individual selling shareholder through secondary market transactions offloaded 0.554cr shares at Rs. 321 per share to Ashoka India Equity Investment Trust Plc, Axis Growth Avenues AIF and 360 ONE Special Opportunities Fund. Consequently, P&PG had 93.5% stake, while public had 6.5% stake in GSL (public shareholding mainly included Ashoka India Equity Investment Trust Plc, Axis Growth Avenues AIF and 360 ONE Special Opportunities Fund; each with 1.48% stake in the company).

• Further, now couple of P&PG entities are participating in the IPO and offloading 1.496cr (considering the higher price band). A selling investor is also participating in the OFS issue and partially offloading its stake. Post-IPO, P&PG will have 81.49% stake in the company, while public shareholding will be 18.51%.

• At the higher price band of the IPO, GSL is demanding a premium of 20% to the last transaction executed in Oct. 2023.

Key competitive strengths:

• An ethnic savouries brand with a significant presence in Gujarat coupled

• Diversified product portfolio, capable of capturing growing Indian snacks market

• An established manufacturer of gathiya in India, benefiting from the improving popularity of gathiya as a snack

• Strategically located manufacturing facilities

• Vertically integrated advanced business operations resulting in quality products and cost & operational efficiencies

• Distribution network

• Track record of profitable financial performance

• Experienced promoter and management team

Risk and concerns:

• General slowdown in the global economic activities

• Unfavorable government policies & regulations

• Unfavorable movements in the raw material prices

• Unfavorable sales-mix

• Difficulty in maintaining the profitability

• Competition

Below are the key highlights of the company:

• In FY23, the Indian savoury snacks market, comprising of western snacks and ethnic savouries (including gathiya) was estimated to around Rs. 79,600cr. Further, the western snacks and ethnic savouries contribute 51% and 49% to the domestic savoury snacks market, respectively, in FY23. Over FY23-27E, the Indian savoury snacks market is projected to grow by 11% CAGR to a size of Rs. 1.2lakh cr by FY27 (Source: RHP).

• GSL is the fast-moving consumer goods company in India with a major presence in Gujarat, offering a wide variety of savoury products under the brand “Gopal”, including ethnic snacks such as namkeen and gathiya; western snacks such as wafers, snack pellets and extruder snacks; and other fast-moving consumer goods such as papad, spices, besan, noodles, rusk and soan papdi. Apart from Gujarat, GSL also has a scattered presence in other nine states (including Maharashtra, Uttar Pradesh, Madhya Pradesh, Rajasthan, etc.) and two Union Territories. As of 30th Sept. 2023, its product portfolio comprised of 84 products with 276 SKUs across various product categories, thereby addressing wide variety of consumer tastes and preferences.

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