Tepid Listing: Gopal Snacks Makes Disappointing Debut On Exchanges At 12% Discount From IPO Price

Gopal Snacks, a player in the savoury snacks market, saw its shares making a tepid debut on the stock exchanges today. The much-anticipated initial public offering (IPO) witnessed the company's shares opening significantly lower than the issue price, disappointing investors and experts alike.

On the National Stock Exchange (NSE), Gopal Snacks' share price opened at Rs 351 per share, marking a decline of 12.47% from the issue price of Rs 401. Similarly, on the Bombay Stock Exchange (BSE), the share price opened at Rs 350 apiece, down 12.72% from the issue price. This unexpected drop in share price caught many investors off guard, especially after experts had anticipated the listing to fall within the range of Rs 370 to Rs 392 per share.

The lacklustre debut comes despite the healthy subscription numbers the IPO garnered. According to BSE data, the Gopal Snacks IPO was oversubscribed 9.02 times on the third day, with the retail investors portion being subscribed 4.01 times, the non-institutional investors (NII) portion 9.50 times, and the Qualified Institutional Buyers (QIB) portion a whopping 17.50 times. The employee portion, which was reserved not more than 50% of the shares in the public issue, saw a subscription of 6.87 times. Eligible employees were offered a discount of Rs 38 per equity share.

The IPO, comprising an offer-for-sale (OFS) of equity shares worth Rs 650 crore by the promoters and other investors, attracted considerable attention from the market. Founder Bipinbhai Vithalbhai Hadvani and Gopal Agriproducts Private Ltd were among the major sellers, with shares worth Rs 80 crore and Rs 520 crore, respectively. Additionally, Harsh Sureshkumar Shah intended to sell shares worth Rs 50 crore.

Gopal Snacks, known for its wide range of savoury products under the "Gopal" brand, offers items such as soan papdi, papad, spices, noodles, rusk, wafers, extruded snacks, and snack pellets. Despite its strong market presence and diversified product portfolio, the company's share price struggled to meet market expectations on its listing day.

The IPO's grey market premium (GMP), a measure of investors' readiness to pay more than the issue price, was reported at -25, indicating a discount of Rs 25 compared to the issue price. Analysts had predicted a listing price of Rs 376 apiece, which is 6.23% lower than the IPO price of Rs 401. The trend in the grey market over the last 16 sessions suggested a predisposition towards a discount listing, with GMP ranging from Rs -25 to Rs 122, according to investorgain.com.

The book-running lead managers for the Gopal Namkeen IPO were Axis Capital Limited, JM Financial Limited, and Intensive Fiscal Services Private Limited, while Link Intime India Private Ltd acted as the registrar for the offering.