The maiden public issue of Telangana-based Srivari Spices and Foods received an overwhelming response from investors, as the issue was subscribed 418.5 times on August 9, the final day of bidding.
Investors have bid for 64.27 crore equity shares against the offer size of 15.36 lakh equity shares, resulting in 418.46 times subscription, as per data available with NSE. This translated into nearly Rs 2,700 crore worth of bids against the issue size of Rs 9 crore.
The offer has received the maximum bids from retail investors at 36.98 crore equity shares, followed by high networth individuals (non-institutional investors) at 24.06 crore shares, and qualified institutional buyers at 3.22 crore shares.
This is the highest subscription among SME IPOs launched in the current calendar year, as per the data collated by Chittorgarh.com.
The spices and flour (chakki atta) manufacturer intends to raise Rs 9 crore via public issue of 21.42 lakh equity shares including a market maker portion of 1.08 lakh equity shares and anchor allocation of 6.06 lakh shares.
The IPO was completely a fresh issue by the company. It has already mobilised Rs 2.54 crore via anchor book.
Neomile Growth Fund-Series I has subscribed to 3.66 lakh shares and Zinnia Global Fund Pcc-Cell Dewcap Fund to 2.4 lakh shares in the anchor book, at the upper price band.
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The price band for the offer was Rs 40-42 per share.
Srivari Spices, which sells products in Telangana and Andhra Pradesh, is planning to utilise fresh issue proceeds mainly for its working capital requirements (Rs 5.92 crore), apart from general corporate purposes.
It operates two business models; the first is direct-to-customer (D2C), wherein it delivers products directly to customers using approximately 15,000 retail stores, and the second is business-to-business (B2B), wherein it delivers products to suppliers. It has production facilities in Telangana, and sources raw materials directly from farmers.
The basis of allotment of IPO shares will be finalised by August 14, and eligible investors will get shares in their demat accounts by August 17, while the refunds will be credited to the bank accounts of unsuccessful participants by August 16.
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The much-awaited listing of shares, especially after a robust response to the IPO, will take place on August 18.
Srivari Spices shares were available at a massive 59 percent premium to the upper price band in the grey market, which is an unofficial platform where IPO shares can be bought and sold till listing, analysts said on condition of anonymity. Generally, investors look at the grey market premium (GMP) to know the expected listing price of an IPO.
Promoters Neihaa Rathi and Rathi Narayan Das hold a 99.9 percent equity stake in the company which has recorded healthy financial performance in the past years.
Profit in the year ended March FY23 grew by 329 percent to Rs 3.13 crore compared to the previous year, and revenue increased by 103 percent to Rs 35.8 crore during the same period.
On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) jumped by 259 percent on-year to Rs 5.88 crore with margin expansion of 711 bps at 16.4 percent in FY23, but finance cost increased substantially to Rs 0.86 crore from Rs 0.11 crore during the same period following an increase in borrowings.
Its borrowings at the end of March FY23 stood at Rs 12.83 crore, increasing from Rs 2.77 crore in FY22.
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