Prataap snacks makes strong debut lists at 35% premium to ipo price

Prataap Snacks makes strong debut; lists at 35% premium to IPO price

Prataap Snacks makes strong debut; lists at 35% premium to IPO price on Business Standard. Prataap Snacks listed at Rs 1,270, a 35% premium against its IPO price of Rs 938 per share on the NSE.

Latest News Prataap Snacks has made a strong debut on bourses by listing at Rs 1,270, a 35% premium against its initial public offer (IPO) price of Rs 938 per share on the National Stock Exchange (NSE). On BSE, the stock listed at Rs 1,250, a 33% above its issue price.

Post its listing, the stock hit its high of Rs 1,319 on the NSE and Rs 1,317 on BSE. At 10:02 AM; it was trading at Rs 1,283 on the NSE. A combined 2.64 million shares exchanged hands on the counter on both the exchanges.

The Rs 482 crore IPO of Prataap Snacks Share Price was subscribed 47.29 times, data from stock exchanges showed. The portions reserved for qualified institutional buyers (QIBs) and retail investors were subscribed 77 times and 8 times, respectively. The portion set aside for high-net-worth investors saw 101 times subscription.

The proceeds from the fresh issue will be used by the company for repaying borrowings, funding capital expenditure requirements for

setting up new production lines, modernization of existing manufacturing facilities, and investment in subsidiary Pure N Sure, and marketing and brand-building activities.

Prataap Snacks is one of the fastest growing snacks company in organized market in India.

Over the years, the company has been gaining market share and its market share increased from 1% in 2010 to 4% in 2016 in the organized snacks market in India. “At 202 times of its FY17 earnings, the issue is richly valued at upper end of its price band i.e.

Rs 938. Ignoring its lower profitability in FY17 and valuating the issue on FY16 EPS still yields a high P/E of 73.0 times.

Its peer in exactly same industry i.e. DFM Foods, also has good margins (10% in FY17) and handsome return profile (~20%). For Prataap to justify this high valuation, remarkable improvement in profitability is required which may come at the cost of lower growth,� Angel Broking said in IPO note.

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