Baba Food Processing stock slips 5% after listing at IPO price on NSE SME

Baba Food Processing IPO was subscribed 69 times

The stock of Baba Food Processing made a muted debut on the NSE, listing at the IPO price of Rs 76 on November 15. Soon after listing, the stock slipped 5 percent to Rs 72.2 on the SME platform of the exchange.

Shares of Baba Foods were trading at a 13 percent premium in the grey market, which is an unofficial ecosystem where shares start trading before the allotment and until the listing day. Most investors track the grey market premium (GMP) to get an idea of the listing price.

The issue had received a good response from investors with 69 times subscription, the retail portion was booked 60 times, non-institutional investors bid 84 times, and qualified institutional buyers remained at the forefront, picking up 147 times their allotted quota.

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The Baba Food Processing IPO opened for subscription on November 3 and closed on 7th. The price band for the issue was fixed at Rs 72-76 per share. Through the IPO, the company raised Rs 33 crore. The offer was entirely a fresh issue of 43.42 lakh shares.

The company will use the proceeds to invest in its 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.

The company will further use the proceeds 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.

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Horizon Management was the book-running lead manager, Mas Services Limited was the registrar and Nikunj Stock Brokers was the market maker for the issue.

Baba Food Processing is an agro-food manufacturing company. It 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.