Shares of Baba Food Processing listed at par to the IPO issue price of ₹76 on the SME platform of the National Stock Exchange on Wednesday, November 15. Soon after its debut, the stock tumbled 5% to trade at ₹ 72.2 on the SME platform.
Ahead of the listing,
The grey market is an unofficial platform wherein the IPO shares can be bought and sold till the listing. Most investors generally get a bit of help from the grey market to guess the possible listing price of any IPO.
The offer had received a strong response from investors with 69 times subscription, led by qualified institutional buyers. The qualified institutional buyers’ category was booked 147 times, the retail portion was subscribed 60 times, while the non-institutional investors’ quota was booked 84 times.
The issue, which was open for bidding from November 3 to November 7, had a price band of ₹72 to ₹76. Investors were able to bid for a minimum of 1,600 shares in one lot and in multiples thereof.
At the upper end of the price band, the company raised ₹33 crore. The IPO consisted of entirely a fresh issue of 43.42 lakh equity share; there was no offer for sale (OFS) component.
The capital raised from the IPO will be used to invest in the company’s wholly owned subsidiary, Panchakanya Foods Private Limited (PFPL), to set up a manufacturing unit in Patna, Bihar, comprising an ultra-modern highly automated roller flour mill and chakki whole wheat atta mill.
Further, the proceeds will be used to purchase machinery for manufacturing chickpea flour (Besan) and roasted gram flour (Sattu) in its existing manufacturing unit in Ranchi and prepayment or repayment of all or a portion of certain outstanding unsecured borrowings availed by the company.
Horizon Management was the book-running lead manager to the issue, while Mas Services Limited was the registrar. Nikunj Stock Brokers was Baba Food Processing’s market maker.
The company, an agro-food manufacturing firm, manufactures a wide range of products, including whole wheat atta (wheat flour), refined flour (maida), tandoori atta and semolina flour (sooji). The company owns a manufacturing unit in Nagri, Ranchi, and plans to set up another unit in Patna, Bihar.
