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Goyal Salt IPO (NSE SME) aims to raise Rs 18.63 crores. The issue is entirely a fresh issue of 49.02 lakh shares. Goyal Salt Limited is engaged in the business of refining raw salts procured from sub-soil brine in the state of Rajasthan for use as industrial salts and edible salts.

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About Goyal Salt IPO

• Goyal Salt Limited (formerly known as Goyal Salt Pvt. Ltd.) is situated on the land of Nawa City near Sambhar Lake (India’s largest inland salt water lake), Rajasthan.
• Company is primarily engaged in the business of refining of raw salts procured from lake brine and sub soil brine in the state of Rajasthan for useable as industrial salts and edible salts.
• Company refines and supplies pure, refined and quality range of triple refined free flow iodized salt, industrial salt, double fortified salt and triple refined half dry salt.
• The Promoters of Company are Mr. Rajesh Goyal, Mr. Pramesh Goyal, Mr. Lokesh Goyal, Kunj Bihari Goyal HUF, Rajesh Goyal HUF, Parmesh Goyal HUF, Lokesh Goyal HUF, Ms. Radhika Goyal, Ms. Priyanka Goyal and Ms. Rekha Goyal.

Anchor Investors:

• Company is promoted by first generation entrepreneur Mr. Gaurav Munjal

Goyal Salt: Financials

Salient Points: Goyal Salt IPO

• In salt refining processes, raw salts are converted into a variety of products such free-flow iodized salt, half-dry salt, and double-fortified salts.
• The process of brine evaporation depends on the natural process of solar evaporation, which is affected by temperature, air humidity, solar radiation, wind energy and solar heat.
• Seasonal variations in weather pose significant risks to our salt cultivation and refining business.
• Besides human consumption, industrial salt is used to meet requirements for various industries including chemical, dye textiles, detergent & soap, cattle feed, leather, power generation, oil & gas and food Industries.
• The gross revenue from operations contributed by each of its products in last three fiscal years are as under:

• The company proposes to utilize the net proceeds towards funding the following objects:

• Company has been granted the opportunity to supply refined iodized salt to the State Government of Madhya Pradesh under the Public Distribution System (PDS), as per the orders of the Madhya Pradesh State Civil Supply Corporation. In the past, it also received similar offers to supply iodized salt to the State Governments of Uttar Pradesh and Jharkhand under PDS.
• Government procurement contracts play a crucial role in maintaining its supplies, generating revenues, and ensuring steady cash flows. n the last two Fiscal Years ended on March 31, 2023 and March 31, 2022 we have supplied Rs. 3,66.58 Lakhs and Rs. 1,520.14 Lakhs constituting 66.05% and 22.99% respectively of our revenue to the Governments.
• Company besdes B2G and B2B is moving into B2C segment with its own branding.
• During FY 24, company is strategically venturing into the Business-to-Consumer (B2C) market segment. To effectively tap into this market, we have undertaken several initiatives like redigning the packaging, brand creation, enhance distribution reach and add capacities.
• Have hired Karishma Kapoor as brand Ambassador. Company proposes to utilise Rs. 106.30 Lakhs towards Brand Creation and Marketing Expenses.
• It also intends to reach out to the international markets.
• It is embarking on a geographical expansion plan by entering South and Central India. To facilitate this expansion, it has made a strategic investment in acquiring industrial land located in District Kacchh, Gujarat.
• Besides salt from own sources, company heavily relies on third-party suppliers, accounting for 37.85% of its total sales revenue in FY23.
• Its refining unit is located at renowned salt area in Nawa City near Sambhar Lake.
• It has taken secured loan of Rs. 1500 Lacs from Yes Bank.

• Its PE ratio is 19.6x (fy23 earnings). Good jump in revenues & NP in Fy23 has been aided by Govt orders under PDS.
• I intend to apply in Goyal Salt IPO subject to Fund constraints.
• Company in my view, is likely to give steady performance going forward.
• The lead book running manager as well as the market make is Holani Consultants. The last few IPOs lead managed by them have given decent return to the investors. These include names like Infollion Research Services, Shera Energy Limited, Cool Caps Industries Limited, Insolation Energy Limited etc.
• GMP as reported on social media is around Rs. 26.
• Please do your own diligence as SME IPOs are more volatile and risky than mainboard IPOs and need more funds and can come under SEBI scanner for excessive speculation in recent times.

• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in 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.