Bumper Listing: SME IPO Makes Strong Debut On Dalal Street, HOAC Foods Lists At 206% Premium

Hariom Atta & Spices, a subsidiary of HOAC Foods India, soared to new heights with its shares opening at ₹147 each on the NSE SME platform. This opening price marked a premium of 206% over its issue price of Rs 48 per share.

The SME IPO, valued at Rs 5.54 crore, captivated the attention of investors during its subscription period from May 16 to May 21, 2024. Priced at Rs 48 per share, the IPO consisted solely of a fresh issue of 11,55,000 shares, with no offer-for-sale component. The company plans to channel the net proceeds from the IPO towards fulfilling its working capital requirements and general corporate purposes.

Drawing widespread interest from all quarters of investors, the IPO witnessed a strong subscription rate of 2,013.64 times, reflecting the immense confidence and enthusiasm in the prospects of Hariom Atta & Spices. The market capitalization of the IPO surged to Rs 18.45 crore, as reported by Chittorgarh.

Hariom Atta & Spices specializes in crafting a diverse array of products, ranging from flour (chakki atta) to herbs & spices, unpolished pulses, grains, and yellow mustard oil, all marketed under the brand name "HARIOM." The company distinguishes itself by meticulously sourcing raw materials from various regions across the country and processing them without artificial preservatives or chemicals. This commitment to purity and freshness resonates strongly with consumers and has enabled the brand to carve a niche in the Delhi-NCR region.

With a focus on quality and sustainability, Hariom Atta & Spices has devised a robust manufacturing and packaging strategy to ensure that its products retain their freshness until the end of their shelf life. The company promises to minimize waste and offer a diverse range of products.

Operating through an extensive network of 10 Exclusive Brand Outlets, including company-owned and franchisee-owned outlets, Hariom Atta & Spices has positioned itself to cater to the discerning tastes of consumers in the Delhi-NCR region and beyond.

Despite the strong market debut and strong fundamentals, Hariom Atta & Spices operates in a fiercely competitive and fragmented market segment, as noted by Dilip Davda, the contributing editor at Chittorgarh. While the company has shown an average financial performance in the reported periods, investors should carefully assess their investment decisions. With small equity capital post-IPO, investors should anticipate a longer gestation period for migration. However, well-informed and cash-surplus investors may consider parking moderate funds for the medium term, advised Davda.

In terms of financial performance, the company reported revenue from operations of Rs 1,148.59 lakh for the nine months ended December 31, 2023. For the fiscal years ending in 2023, 2022, and 2021, revenue stood at Rs 1,208.56 lakh, Rs 1,087.27 lakh, and Rs 742.26 lakh, respectively. Profit After Tax (PAT) for the nine months ended December 31, 2023, and the fiscal years ending in 2023, 2022, and 2021 amounted to Rs 74.50 lakh, Rs 58.79 lakh, Rs 27.33 lakh, and Rs 12.85 lakh, respectively, as per the DRHP report.

While the market debut of Hariom Atta & Spices has been nothing short of spectacular, investors are advised to conduct thorough due diligence and weigh the risks against the potential rewards before making investment decisions.