Gopal Snacks IPO Day 2: Latest Subscription Status GMP Details, Is It Worth Bidding?

Momentum on Day Two

Gopal Snacks, the Rajkot-based snack manufacturer, on Thursday is witnessing a surge in investor interest as its Initial Public Offering (IPO) progresses into its second day. Despite a sluggish start on the first day, the IPO is gaining momentum, with the retail section fully booked within hours of opening. As of 11:55 IST, the overall subscription rate stands at an impressive 88%, indicating growing confidence among investors.

Day One: A Slow Start

The IPO, which opened for subscription on Wednesday, March 6, experienced a lukewarm response on its first day, with a subscription rate of 56%. While retail investors showed robust interest, subscribing at 89%, institutional investors displayed cautious optimism, with the Qualified Institutional Buyers (QIB) portion yet to be filled. Non-Institutional Investors (NII) subscribed at 49%, reflecting mixed investor sentiment on the opening day.

Current Status: Retail Investors Lead the Charge

On the second day, retail investors continued to drive subscription rates, oversubscribing their portion by 1.34 times. Non-Institutional Investors (NII) displayed increased confidence, with 81% of their portion booked. The QIB portion, previously unbooked, is now at 8%, signaling growing institutional interest. Additionally, the employee portion has been oversubscribed by 2.38 times, highlighting employee confidence in the company's future prospects.

Offer Details and Financial Performance

Gopal Snacks aims to raise capital by offering 1,19,79,993 shares to the public, with a price band set between Rs 381 to Rs 401 per equity share. Bipinbhai Vithalbhai Hadvani, Dakshaben Bipinbhai Hadvani, and Gopal Agriproducts are among the company's promoters. Between March 31, 2022, and March 31, 2023, Gopal Snacks Limited witnessed a remarkable 170.52% increase in profit after tax (PAT) and a 3.1% revenue growth, underscoring its strong financial performance and growth potential.

IPO GMP for Gopal Snacks today

The grey market premium, or IPO GMP, for Gopal Snacks is +40. According to investorgain.com, this shows that the price of Gopal Snacks' shares was selling at a premium of Rs 40 in the grey market.

Gopal Snacks' expected listing price is Rs 441 per share, 9.98% more than the IPO price of Rs 401, taking into account the upper end of the IPO pricing band and the current premium in the grey market.

The IPO GMP anticipates a tepid listing based on the grey market activities of the last nine sessions. Analysts at investorgain.com estimate that the lowest GMP is ₹0 and the maximum GMP is Rs 122.

A "grey market premium" denotes the willingness of investors to part with more money than the issue price.

Geojit Financials Review

Geojit has endorsed a 'Subscribe' rating in addition, citing robust top and bottom line growth. It stated that enhancing the company's market presence is still a top priority. 'Subscribe' is also justified on a medium- to long-term basis due to vertically integrated manufacturing facilities, a lean balance sheet, strong return ratios, and a promising industry outlook.

Diverse Product Portfolio and Market Potential

The company sells a variety of savoury goods under the "Gopal" brand, such as noodles, gramme flour, papad, spices, and other fast-moving consumer goods as well as ethnic snacks like namkeen and gathiya.With a diverse product portfolio that caters to both traditional and modern snack preferences, Gopal Snacks is well-positioned to capitalize on the growing demand for convenience foods and ethnic snacks.

Industry Comparisons and Peer Analysis

As per the red herring prospectus (RHP), Gopal Snacks' listed peers include Bikaji Foods International Ltd and Prataap Snacks Ltd, with P/E ratios of 104.67 and 137.87, respectively. Compared to its peers, Gopal Snacks offers investors an attractive valuation, making it a compelling investment opportunity in the competitive snack market.

Riding the Wave of Investor Confidence

As subscription rates continue to climb, Gopal Snacks IPO underscores growing investor confidence in the company's future growth prospects. With strong financial performance, a diverse product portfolio, and favorable industry comparisons, Gopal Snacks is poised to emerge as a key player in the snack market. Investors seeking exposure to the FMCG sector may find Gopal Snacks IPO an appealing investment opportunity.