Madhusudan Masala's initial public offering (IPO) opened for subscription on Monday, aiming to raise an estimated ₹23.8 crores ($3.2 million). The IPO, which is entirely a fresh issue of 3.4 million equity shares, will close on Thursday, September 21.
On the first day, the IPO was subscribed 6.14 times with a positive response from retail investors, who oversubscribed their portion by 11.20 times. Non-institutional buyers also showed interest, subscribing their set portion 2.51 times, while Qualified Institutions Buyers (QIBs) subscribed their portion by 1%, according to data on chittorgarh.com.
The company's IPO price band has been set in the range of ₹66 to ₹70 per equity share of face value of ₹10 each. The lot size is 2,000 equity shares and in multiples of 2,000 equity shares thereafter. Retail investors can submit an application for one lot, while non-institutional investors must apply for at least two lots.
The company has allocated 50% of the net IPO offer to qualified institutional bidders (QIBs), 15% to non-institutional investors, and the remaining 35% to retail investors. Hem Securities Limited is serving as the book running lead manager of the Madhusudan Masala IPO, with Kfin Technologies Limited as the registrar for the issue.
Madhusudan Masala plans to use the proceeds from the offering to meet its working capital requirements and for general corporate purposes. For fiscal year ended March 31, 2023, the company reported a net profit of Rs. 575.89 lakh ($769k) with revenue of Rs. 12,750.57 lakh ($17m), an EBITDA margin of 8.66%, and a profit margin of 4.53%.
The company, promoted by Dayalji Vanravan Kotecha, Vijaykumar Vanravan Kotecha, Rishit Dayalaji Kotecha, and Hiren Vijaykumar Kotecha, operates in the highly competitive and fragmented spices segment. It manufactures and processes more than 32 types of spices under its own brand names "Double Hathi" and "Maharaja", and also deals in whole spices in retail and bulk quantities as well as other food products.
Madhusudan Masala's manufacturing facility is located at Industrial Area Hapa, near Jamnagar, Gujarat. The company has a network of 2,100 wholesalers and 3,700 retailers in Gujarat, Maharashtra, and Rajasthan.
The grey market premium (GMP) for Madhusudan IPO today was +₹59 similar to the previous three trading sessions. This suggests that investors are willing to pay more than the issue price. Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Madhusudan Masala share price is ₹129 apiece, which is 84.29% higher than the IPO price of ₹70.
The shares of Madhusudan Masala are set to be listed on NSE’s SME platform on October 3.
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