Prataap Snacks IPO likely to hit capital market by December

The other IPO which also received huge responses were Happiest Minds Technologies and Chemcon Speciality Chemicals, which was subscribed 150.98 times and 149.3 times respectively. Interestingly, both these stocks have seen bumper listing gained over 100 percent. Let's see how the IPO subscription and listing happened in 2020 so far, considered only IPOs issue size over Rs 100 crore.

The initial public offer of Prataap Snacks Ltd, the maker of Yellow Diamond Chips, is likely to hit the capital market by December, said Amit Kumat, Chief Executive Officer and Managing Director, Prataap Snacks.

The company had received capital market regulator's approval for the IPO in April.

The Indore-based company, which filed its draft red herring prospectus last October, plans to raise Rs 250 crore through a fresh issue of shares and an offer for sale of 2.2 million by Sequoia Capital and 0.75 million shares by the promoters. The company clarified that Sequoia Capital would continue to remain a major shareholder post the IPO.

Edelweiss, JM Financial and Spark Capital are managing the issue.

The total IPO size is likely to be between Rs 400-500 crore, Kumat said. Proceeds from the public offering will mainly be used for funding capital expenditure requirements, repayment of borrowings, modernisation of existing manufacturing facilities, marketing and brand building activities.

Prataap Snacks had last year brought in a second private equity investor as a shareholder. Faering Capital, a private equity firm, had picked 2.93 percent stake in the company in June 2016 by buying shares from promoters. The PE firm paid around Rs 45 crore for the stake, valuing the company at Rs 1,536 crore.

Prataap Snacks was started in 2003 by brothers Amit and Apurva Kumat and Arvind Mehta. It makes and sells potato-based snacks, extruded snacks and namkeen. Five years ago, it acquired the snack foods business of its group company, Prakash Snacks and brought in the Yellow Diamond brand and the snack foods business under one umbrella.

The company’s entry into the public market would expand the basket of listed snacks makers with Prataap Snacks turning out to be among the biggest with a turnover of Rs 900 crore in last fiscal year. One listed firm, DFM Foods, which operates under the brand Crax, counts PE firm WestBridge Capital as a key shareholder.