Gopal Namkeen IPO Review

Gopal Snacks Limited is an Rajkot based FMCG company that deals in ethnic and Western snacks. Gopal Namkeen IPO is an issue of Rs 650.00 crores. The issue is entirely an offer for sale of 1.62 crore shares.

IPO opensMarch 6, 2024
IPO ClosesMarch,11, 2024
IPO Size (Rs.)₹650.00 Cr
IPO Size (shares)16,209,476 shares
BreakupFresh issue ₹165.00 Cr+ OFS ₹86.19 Cr
Face Value:₹ 10
IPO Price in Rs :₹381 to ₹401 per share
Minimum Lot37 Shares
Listing AtNSE, BSE
NII Quota~15%
Retail Quota~35%
 Lead ManagerIntensive Fiscal Services , Axis Capital , Jm Financial
RegistrarLink Intime

About Gopal Snacks Limited:

  • They are a fast-moving consumer goods company in India with a major presence in Gujarat, offering a wide variety of savoury products under our brand ‘Gopal’, including ethnic snacks such as namkeen and gathiya, western snacks such as wafers, snack pellets and extruder snacks, along with fast-moving consumer goods that include papad, spices, gram flour or besan, noodles, rusk and soan papdi which are semi-perishable in nature.
  • As of September 30, 2023, their product portfolio comprised 84 products with 276 SKUs across our various product categories.
  • Gopal Namkeen 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, Maharashtra; Rajkot, Gujarat; and Modasa, Gujarat and these facilities primarily focus on the manufacturing of finished products.
  • The three ancillary manufacturing 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 such as gathiya, namkeen and snack pellets. Of the three ancillary manufacturing facilities, two ancillary manufacturing facilities are located at Rajkot, Gujarat and one ancillary manufacturing facility is located at Modasa, Gujarat.
  • The company has a wide distribution network comprising three depots and 617 distributors, complemented by a sales and marketing team comprising 741 employees as of September 30, 2023.
  • It owns a fleet of 263 logistics vehicles to support its distribution network.

Financials: Gopal Snacks Limited

Particulars / Rs. Cr2023(06)2022(06)2023(12)2022(12)2021(12)
Revenue from Operations676.2699.31,394.651,352.161,128.86
Revenue Growth (%) as stated-3.30%3.14%19.78%
EBITDA as stated94.2693.55196.2394.860.35
EBITDA Margin (%) as stated13.94%13.38%14.07%7.01%5.35%
Profit/Loss Before Tax74.9870.97151.8554.0626.5
Net Profit for the year55.5751.96112.3741.5421.12
Net Profit (%) as stated8.22%7.43%8.06%3.07%1.87%
Share Capital12.461.1312.461.131.13
Net Worth as stated346.1230.18290.88177.66135.74
EPS – Basic & Diluted (₹)4.46^4.17^9.023.331.7
RONW (%)16.05%^22.57%^38.63%23.38%15.56%
NAV (₹)27.7818.4723.3414.2610.89
Post issue Share Capital12.46    
IPO price401.0    
EPS Fy239.0    
PE Fy2344.5    
EPS Fy24 (annualized)8.9    
PE Fy24  (annualized)45.0    
Market cap in Lacs4,996.5    
Market cap / Sales3.58    

Gopal Namkeen IPO: Anchors

  • Gopal Snacks Limited has garnered ₹193.94 crores from anchor investors ahead of the IPO. nstitutions who participated in the anchor book include Ashoka White Oak, White Oak MF, DSP MF, Quant MF, IIFL Wealth & Asset Management (360 One), Natixis, BNP Paribas, OptiMix Global Emerging Markets Share Trust, Edelweiss MF, HDFC Life Insurance, ITI MF, Leading Light Fund, Bay Capital, BoFA Securities and Copthall Mauritius etc.
  • Out of the total allocation of 48,36,657 Equity Shares to the Anchor Investors, 35.05 % were allocated to 5 domestic mutual funds through a total of 9 schemes.

Gopal Namkeen IPO: Salient Points

  • Promoters stake will come down from 94% to 81% post the IPO.
  • Indian savoury snacks market is projected to grow by 11% CAGR to a size of Rs. 1.2lakh cr by FY27.
  • The western snacks and ethnic savouries contribute around 51% and 49% to the domestic savoury snacks market, respectively.
  • All the 600 cr. being raised in the IPO is OFS by promoters is to repay the personal debt taken by them to buy their elder brother‘s 26% stake in the company.
  • e company has been focusing on
  • Gujarat is the major market for company with 76% of revenue for 1HFY24.
  • It enjoys good share in local savory snacks, especially gathiya (31% market share in the organized sector)
  • From last few years, it has also focused on states like Maharashtra, Madhya Pradesh, Rajasthan, and Uttar Pradesh etc. and also put its focus on a wider range of savory snacks.
  • Peers
CompanyCMP (₹)Revenue(cr)Net Profit(₹ cr)NPM %PEMacp/salesRONW%
Gopal namkeen401.01394.756.04.0%453.638.63
Bikaji Foods5161966.11286.5%67.46.0214.15
Prataap Snacks1,0221652.9201.2%1191.483.1
  • It is not comparable strictly to the above peers as it is a regional player while Bikaji and Pratap have foot pint all over the country.
  • There are allegations of misbranding, misleading advertisements, exceeding palm oil limits and 45 cr of disputed tax liabilities against the company.
  • In Nov 2022, promoter acquired stake from his brother @ Rs. 174 per share.
  • Further In Oct 2023, stake of 4.4% was sold to institutional investors @ Rs. 321 per share.
  • There has been some slowdown in business of the company. Could be due to other factors but the the growth has been lower than general growth in the industry and raise some doubt, if this is due to some disruption after the exit of a promoter (brother).
  • The impulse packs of snacks (Rs5/Rs10) remain its major SKUs.. It recently took few grams weight reduction per pack in them to increase profitability.
  • Gopal Namkeen IPO is coming at a PE ratio of 44.5x(fy23 earnings) and 45x ( fy24 annualized earnings).
  • Not quite sure if I will apply for this IPO. Sales growth has been lower than peers and pricing power is limited as majority of sales is coming from Rs. 5/- pouch. Further Mainline IPOs have recently witnessed muted listings.
  • GMP as reported on social media has been Rs. 30.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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