Italian Edibles IPO is a fixed price issue of Rs 26.66 crores. The issue is entirely a fresh issue of 39.2 lakh shares. Italian Edibles Ltd is a manufacturer, supplier, and exporter of confectionery products, Rabdi [Meethai Sweet] and milk paste in the country.

About Italian Edibles:

• Italian Edibles Ltd was incorporated in the  year 2009.
• The company is into the business of offering a wide range of confectionery products like Rabdi, milk paste, chocolate paste, lollipops, candies, jelly sweets, multigrain puffed buns, and fruit-based products.
• The manufacturing facilities are located in Indore in the state of Madhya Pradesh.
• company has been manufacturing delicious mouthwatering confectionery products for the last 14 years.
• Our confectionery products are sold under its brand name and logo.
• They offer a wide range of confectionery’s such as Rabdi [Meethai Sweet], Milk Paste, Chocolate Paste, Lollipops, Candies, Jelly Candies, Multi-Grain Puff Rolls, Fruit Based Products.
• Their confectionery products are sold PAN India, majorly in rural and semi-urban areas of Andhra Pradesh, Assam, Bihar, Chhattisgarh, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Karnataka, Kerela, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, Uttarakhand, West Bengal and through local wholesalers and distributors located in these areas.
• Their top customers include Chocolate World, Yuvraj Agency, Bakewell Biscuits Private Limited, R. K. Prabhavati Tarders, Mamta Stores, Ma Laxmi Traders, Suria Distributor etc.
• Also, its Jelly Candies are sold to Dharpal Premchand Ltd (BABA) group.
• They also manufacture range of products under the private labeling arrangement with our customers and is exclusively sold by third party. ,

Financials: Italian Edibles

Italian Edibles IPO: Salient Points

• The promoters current shareholding shall stand diluted to from 100% at present to 73.47%..
• The India confectionery market size reached INR 338.2 Billion in 2022. Looking forward, IMARC Group expects the market to reach INR 485.9 Billion by 2028, exhibiting a growth rate (CAGR) of 6.3% during 2023-2028.
•  Italian Edibles is in the business of confectioneries and other food products. 
• The company sells its products under the brand name “Ofcour’s”.  
• The Net Proceeds are proposed to be utilized in the manner set forth below:

• Over Over the years, they have developed a large pan-India distribution network. As of August 31, 2023, they had approximately 450 Suppliers and distributors located across 22 states in India and are exporting their products through network of 5 merchant exporters.
• Italian Edibles Ltd has a strong point of presence in the rural and semi-urban areas.
• Their consumer segments largely include teenagers, young adults and children’s located in rural and semi-urban areas of India. Apart from selling confectionery products within India, they also export to various countries such as Nigeria, Yemen, Senegal and Sudan.
• Exports amount to 4-5% of their revenues.
• Key Performance Indicators of Company:

• It revenue saw a slight dip last year, but margins have seen improvement.
• Company is expanding its manufacturing capacity by about 23% and will shift existing units to new units.
• Company has availed business loans at 15-16% rate of interest from names like Axis Bank Ltd, Fullerton India Credit Co. Ltd, Magma – Poonawalla Fin. Ltd, Standard Chartered etc. Retirement of this debt will boost its profits.
• Peers: Company has shown Lotus Chocolate and Tapi Fruit as their listed peers. Lotus Chocolate is in loss but enjoys higher valuations. It was taken over by Reliance Consumer Products. Tapi Fruit is a manufacturer of jelly based Fruit products and candies and are trading at a P/E of 257x.
• Italian Edibles IPO is coming at a PE ratio of 38x (FY 23) and 20x (fy24 annualized earnings)
• I may apply in Italian Edibles IPO subject to availability of funds. It is bit risky but companies in confectionary segmenet may attract some attention.
• GMP as reported on social media has been Rs. 20.
• First Overseas Capital Limited is the Lead Manager to the issue. Past issues handled by them are below average compared to other lead amangers. These IPOs include Sameera Agro And Infra Limited, Shree OSFM E-Mobility Limited, Electro Force (India) Limited, On Door Concepts Limited, Pyramid Technoplast Limited(mainline), Synoptics Technologies Limited, Cell Point (India) Limited, Nirman Agri Genetics Limited, Kore Digital Limited, Ducol Organics And Colours Limited, Amanaya Ventures Limited, Varanium Cloud Limited etc.
• SME IPO are much more risky and volatile than mainboard IPOs. Further information available in public domain about SME IPOs is limited.
• 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.