It's a rousing start for Prataap Snacks on the bourses today, with the stock attracting an impressive premium to the issue price in early trades.
The stock opened at Rs 1250 on BSE, as against the issue price of Rs 938, and rallied to Rs 1317.05 subsequently before paring some gains. At Rs 1160, the stock is currently up nearly 25% from the IPO price. On the National Stock Exchange, the stock hit a high of Rs 1318.80 after opening at Rs 1270 and is currently at Rs 1152.25.
The Rs 482-crore IPO from Prataap Snacks had received pretty good response and got oversubscribed by 47.39 times.
The qualified institutional investors portion was subscribed nearly 77 times and the non-institutional investors portion was subscribed 10.15 times, while the retail investors category got oversubscribed by about 8.5 times.
The Rs 482-crore issue size included Rs 200 crore through fresh equity issue and the rest from the offer for sale of around 30 lakh shares. The company intends to utilise the proceeds of the IPO to fund its capex, reduce debt and for investment in subsidiary marketing and branding. Funds will be used for other corporate purposes as well.
Prior to the IPO, Prataap Snacks mopped up Rs 143.4 crore by allotting shares to about 15 anchor investors, at the rate of Rs 938 a share. Among the institutions which got shares in the anchor investors category were Small Cap World Fund Inc, Fidelity Funds, Goldman Sachs India Ltd, HDFC Trustee Co. Ltd and SBI Life Insurance Co. Ltd.
The issue price appeared a bit higher, but the fact that Prataap Snacks is among the fastest growing companies in the food space may have prompted investos to subscribe.
Prataap Snacks' revenue grew at a compounded rate of 27.34% in the five years to 2016-17. The company's share in the overall organised snacks market grew to 4% in 2016 from around 1% in 2010.
The domestic organised snacks market, which is valued at Rs 22,000 crore at present, is expected to grow at 14.6% CAGR over the next four years.
Extruded snacks contributed to about 63% of Prataap Snacks' revenue last financial year, while Potato chips and Namkeen contributed 23.85% and 12.23%, respectively.
The company's presence is fairly strong with nearly 220 stockists across 26 states and one union territory. It has more than 3500 distributors spanning across the country.
The main products of Prataap Snacks, which was incorporated in the year 2009, are chips, extruded snacks and traditional savoury. The company's savoury products are sold under brand names like Chulbule and Yellow Diamond. The company's subsidiary is also looking at stepping into the business of chocolate-based confectionary snacks.
