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15 November 2023

Goyal Salt IPO: Adding Flavor to Investment Portfolios

Introduction:

Goyal Salt IPO, a book-built issue of Rs 18.63 crores, saw robust investor interest. The entire issue comprised a fresh offering of 49.02 lakh shares. Bidding for the IPO commenced on September 26, 2023, concluding on October 3, 2023. The allotment process was completed on October 5, 2023, and the shares were officially listed on NSE SME on October 11, 2023.

Key Offering:

Priced in the range of ₹36 to ₹38 per share, the IPO set a minimum lot size of 3000 shares, necessitating a minimum investment of ₹114,000 for retail investors. High Net Worth Individuals (HNIs) were required to invest a minimum of ₹228,000 for 2 lots (6,000 shares).

Market Performance:

As of November 9, 2023, Goyal Salt Ltd's stock was quoted at ₹170.75, showcasing a growth of 3.89%. The stock opened at ₹164.00, attaining a high of ₹173.00 and a low of ₹164.00. The previous closing was ₹164.35, with a total traded value of 1,35,000 shares. The 52-week high and low were ₹173.00 and ₹164.00, respectively.

IPO Details:

The IPO comprised a total issue size of 4,902,000 shares, aggregating up to ₹18.63 crores, with the entire issue being a fresh one. The face value per share was ₹10, and the listing took place on NSE SME.

Ownership Landscape:

Before the IPO, Goyal Salt had a pre-issue shareholding of 12,998,250 shares, which increased to 17,900,250 shares post-issue. The market maker portion consisted of 246,000 shares, managed by Holani Consultants.

IPO Reservation:

The IPO distribution allocated 5.11% to the market maker, 34.04% to Retail Individual Investors (RIIs), and another 27.37% to Non-Institutional Investors (NIIs).

Subscription Dynamics:

As of October 3, 2023, the Goyal Salt IPO witnessed a staggering subscription of 294.61 times. The retail category was oversubscribed at 377.97 times, while NIIs subscribed 382.45 times. The total number of applications was 206,371.

Financial Highlights:

As of March 31, 2023, Goyal Salt reported total assets of ₹3,000.94 lakhs, revenue of ₹11,770.68 lakhs, and a net profit of ₹353.74 lakhs. The net worth was ₹1,618.11 lakhs, with reserves and surplus at ₹534.92 lakhs. The total borrowing was reported at ₹920.11 lakhs.

Key Metrics:

The market cap of Goyal Salt IPO was ₹68.02 crores, with a P/E (x) of 13.97. The post P/E was at 19.19, and the company demonstrated an Earnings per Share (EPS) of ₹2.72 and a Return on Net Worth (RoNW) of 21.86%.

IPO's Objectives:

The net proceeds from the IPO are earmarked for capital expenditure, brand creation, marketing expenses, working capital requirements, and general corporate purposes.

Expert Analysis:

Goyal Salt, despite operating in a highly competitive segment, showcased a surge in bottom lines, especially in FY23, with its focus on the B2C business model. The company aims to establish itself as a household brand, presenting potential rewards for stakeholders.

Conclusion:

Goyal Salt IPO represents a compelling investment opportunity, given the substantial oversubscription and the company's strategic thrust into the B2C market. Investors looking for exposure to the salt industry and its promising prospects might consider this IPO for potential medium to long-term rewards. However, as with any investment, thorough due diligence is advised before making investment decisions.

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