Gopal Snacks, an FMCG company founded in 1999, is quite popular for its Indian snacks served in packets. Their products are not only consumed in India, but they also have international fans. Some of the most popular snacks they produce are gathiya, namkeen, etc.
Gopal Snacks was founded with just Rs. 4200 and has grown into a Rs. 1400 crore family business. The company now has three manufacturing units and is now leading in the niche ‘gathiya’. Gopal is also the country’s 4th largest brand by market share in the organized ethnic savory segment.
Conflict Between Brothers:
But there’s a twist in the story: Mr. Hadvani got his a relationship soured with his elder brother, who is also a shareholder of the company Prafulchandra Hadvani. Mr. Praful has decided to take an exit from the firm and start his new firm by the name of Gokul Snacks, so now Gopal Snacks has decided to set up its IPO.
Mr. Hadvani doesn’t want this IPO to happen, but he’s compelled to do so. He said, “Agar yah karj lie nahin hota, to hum IPO par dhyaan nahin dete (If it wasn’t for the debt, we wouldn’t have looked at an IPO).”
Things You Need To Know:
Here are a few things that you should know before investing in its IPO.
- Gopal Snacks is issuing 1.62 crore shares and raising Rs. 650 crore.
- Promoters hold a whopping 93.5% share of the company, while a 6.5% stake is offered to the public.
- All the money raised will go to its shareholders and promoters, who are selling their shares to the public.
- Retail investors have to invest a minimum of Rs. 14097, which will have 37 lots of Rs. 381 each. On the upper end, they will have to invest Rs. 14837.
- The company recorded a revenue of Rs 1394.65 crores in FY23, and the company’s net profit is Rs 112.4 crores.
- Gopal’s IPO will be listed on BSE and NSE on Thursday, March 14, 2024.
- The IPO will be open for subscription on March 6 and will close on March 11, 2024.
- The price band for the issue has been fixed at Rs 381–Rs 401 per share.
- 50% of the offering will be allocated to qualified institutional investors, 15% to non-institutional investors, and a minimum of 35% will be allotted to retail individual investors.
The company looks great with numbers and has a good brand name, but it also carries its own risk.
Some Red Flags:
- 90% of its revenue comes from gathiya, snacks, etc. Less demand for a particular product could affect the company heavily.
- 80% of its sales are from one region, which is Gujarat. If anything happens to this region, then the company’s financial condition, cash flow, etc. would be stuck.
- The company has also received eight notices from the Food Safety and Standards Act (2006) due to substandard products, misleading advertisements, etc.
- The company’s manufacturing unit is saturated in Gujarat. Any political, social, or economic disturbance could lead to heavy losses for the business.
It has been said by various unlisted market tracking websites that the company has the potential to set a GMP of Rs. 120 per share, which indicates a strong interest by the investors.
