Prataap Snacks shares made a strong debut on the stock exchanges today, opening up over 40% from its issue price after the company recently concluded its Rs 482 crore public offer. The IPO (initial public offer) of Prataap Snacks was subscribed 47.39 times on the last day of bidding. The stock of Prataap Snacks zoomed 40.41% to hit the day’s high of Rs 1,317.05 on BSE. The issue had a price band of Rs 930-Rs 938 per equity share which includes Rs 200 crore through fresh equity issue and the rest from the offer for sale.
The received bids for 17,03,63,400 shares against 36,27,518 shares on offer during 22-26 September. The portion set aside for the qualified institutional buyers (QIBs) portion was subscribed 76.89 times, the quota reserved for non-institutional investors was subscribed 101.15 times while shares reserved for retail investors was subscribed 8.48 times, as per the stock exchange data.
Expert take and Promoters
Angel Broking had kept a neutral rating to the company’s IPO given the high valuation and the low profitability, saying that the company will need to show remarkable improvement in profitability to justify this high valuation. Prataap Snacks is a Sequoia Capital-backed company, which clocked a revenue of Rs 903 crore last fiscal. Sequoia Capital’s stake would reduce to 49% post IPO from 63% at present, while the other three promoters Arvind Mehta, Amit Kumat and Apoorva Kumat’s shareholding will come down to approximately 24% from around 33-34% at present.
The company’s product portfolio includes extruded snacks, chips and namkeen. According to a report by Frost and Sullivan, Prataap Snacks is one of the top six Indian snack food companies in terms of revenues in 2016, and among the fastest growing companies in the Indian organized snack market between 2010 and 2016. The company, which makes products under the ‘Yellow Diamond’ brand, aims to use the proceeds to expand capacity, marketing and brand building activities and retire the debt on its books.