Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,971.8061.65
Stock Analysis, IPO, Mutual Funds, Bonds & More

Prataap Snacks lists at 33% premium over issue price

It intends to use the IPO proceeds to expand capacity and retire the debt on its books.

ETMarkets.com|
Updated: Oct 05, 2017, 09.51 AM IST
0Comments
NEW DELHI: Prataap Snacks on Thursday made a strong market debut as the scrip got listed at Rs 1,250 on BSE, a 33.23 per cent premium to its issue price of Rs 938.

The Rs 482-crore initial public offer (IPO), which was sold during September 22-26, had received good response, with investors bidding for 47.39 times the issue size. The quota limit for qualified institutional buyers (QIBs) was subscribed 76.89 times, non-institutional investors (NIIs) 101.15 times and retail investors 8.48 times.

The company makes products under the ‘Yellow Diamond’ brand. It intends to use the IPO proceeds to expand capacity, marketing and brand building activities and retire the debt on its books. Data showed Prataap Snacks has seen its revenue growing at a compounded annual growth rate of 27.34 per cent over FY13-17. The company's share in the overall organised snacks market grew to 4 per cent in 2016 from 1 per cent in 2010.

At present, the domestic organised snacks market is estimated at Rs 22,000 crore. It is estimated to grow at 14.6 per cent CAGR, over 2016-21.

Brokerage Geojit Financial Services noted that the company intends to foray into relatively untapped high margin chocolate-based confectionary, the market for which is estimated to grow at 15-18 per cent annually over the next four to five years.

That said, Centrum Broking noted that Food snack industry in India has a strong historical dominance of both MNCs such as Pepsico and Indian brands such as Haldiram’s, DFM Foods, Balaji Wafers, having deep pockets for aggressive advertisement and promotion budget makes the space highly competitive. Free cash flow for the company is negative in the last 5 years indicating weak operational efficiency, it noted.

Also Read

10 snacks a day keep 3 meals away

ITC jumps on healthy snacks bandwagon

Healthy snacks pip biscuits in health ministry

Advent to snack on Crax maker DFM Foods as promoters, Westbridge seek exit

Kwality insolvency: NCLT directs lenders to consider Haldiram Snacks' revised offer of Rs 145 cr

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service