Gopal Snacks IPO - Investment Rationale, Issue Details, Financials, Strategies, Risks And More: Anand Rathi

Anand Rathi's IPO Report

Gopal Snacks Ltd. will launch its initial public offering today and the offer closes on March 11. The Rs 650 crore IPO is comprised only of offer-for-sale by promoters and other selling shareholders with no fresh issue of shares.

Rajkot based snacks company has fixed a price band in the range Rs 381–401 per share. The minimum order lot is 37.

Object of the issue:

To achieve the benefits of listing the equity shares on the stock exchanges.

Valuation and outlook

Gopal Snacks is one of the largest and prominent fmcg player in India, offering Indian ethnic snacks and other products. The company intends to accelerate expansion in its focus markets, comprising Maharashtra, Rajasthan, Madhya Pradesh, and Uttar Pradesh.

Gopal Snacks will be focusing on geographical markets which are proximity to existing manufacturing facilities. Therefore, this move will not only enable them to increase their topline growth but will also rationalise its operating expenses.

At the upper price band company is valued at price/equity of 44.5 times with a market cap of Rs 49,966 million post issue of equity shares.

We believe that valuations of the company is fairly priced and recommend a “Subscribe-Long Term” rating to the IPO.

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