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14 March 2024

Chatha Foods IPO

Chatha Foods Limited, a prominent player in the frozen food industry, embarked on its Initial Public Offering (IPO) journey with a book-built issue aiming to raise Rs 34.00 crores. This financial move was facilitated through the fresh issue of 59.62 lakh shares. The bidding for this IPO commenced on March 19, 2024, and concluded on March 21, 2024, marking a significant step for the company towards listing on the BSE SME platform. The tentative date set for this milestone was March 27, 2024.

Key Highlights of Chatha Foods IPO

1. IPO Dates: March 19, 2024, to March 21, 2024.
2. Listing Date: Tentatively scheduled for March 27, 2024.
3. Issue Type: Book Built Issue IPO.
4. Price Band: ₹53 to ₹56 per share.
5. Minimum Lot Size: 2000 shares, translating to a minimum investment of ₹112,000 for retail investors.
6. Issue Size: A total of 5,962,000 shares, aggregating up to ₹34.00 crores.
7. Book Running Lead Manager: Indorient Financial Services Ltd.
8. Registrar: Skyline Financial Services Private Ltd.

IPO Allocation and Subscription Details

The IPO offered a structured allocation across various investor categories:

1. QIB: 1,132,000 shares (18.99%)
2. NII (HNI): 850,000 shares (14.26%)
3. RII: 1,982,000 shares (33.24%)
4. Anchor Investors: 1,698,000 shares (28.48%)

The IPO witnessed robust interest, culminating in a subscription rate of 19.28 times. The breakdown of this subscription rate across categories was as follows:

1. QIB: 8.54 times
2. NII: 44.52 times
3. Retail: 14.60 times

About Chatha Foods Limited

Established in 1997, Chatha Foods Limited has carved a niche in the frozen food sector, supplying a diverse range of products to Quick Serving Restaurants (QSRs), Casual Dining Restaurants (CDRs), and other players within the Hotel-Restaurant-Catering (HoReCa) segment. The company's product lineup spans chicken appetizers, meat patties, chicken sausages, sliced meat, toppings, fillers, and more, totaling over 70 meat products. Operating under the brand name Chatha Foods, it has established a distribution network that spans 29 distributors covering 32 cities across India.

Financial Performance

Chatha Foods Limited has shown commendable growth in its financial performance. The year ending March 31, 2023, saw a 34.14% increase in revenue and a significant 264.66% surge in profit after tax (PAT) compared to the previous fiscal year.

Objectives of the IPO

The net proceeds from the IPO are earmarked for setting up a proposed manufacturing unit and for general corporate purposes, positioning Chatha Foods for further growth and expansion.

Investment Consideration

With a strong footprint in the frozen food industry and a robust growth trajectory, Chatha Foods Limited presents a promising investment opportunity. The IPO, though perceived as fully priced based on FY24 annualized earnings, reflects the company's confidence in sustaining growth momentum, particularly with an increased focus on the vegetarian segment. Investors looking for medium to long-term rewards may find Chatha Foods an attractive option as it expands its operations to cater to both B2B and B2C models.

FAQs for Chatha Foods Limited IPO

What is Chatha Foods Limited IPO?

Chatha Foods Limited IPO is a book built issue aimed at raising Rs 34.00 crores through the issuance of 59.62 lakh shares, with a price band of ₹53 to ₹56 per share.
When did the Chatha Foods IPO take place?

The Chatha Foods IPO opened for bidding on March 19, 2024, and closed on March 21, 2024.
What is the listing date for Chatha Foods IPO?

The tentative listing date for Chatha Foods IPO on the BSE SME platform is March 27, 2024.
What was the price band for the Chatha Foods IPO?

The price band for the Chatha Foods IPO was set at ₹53 to ₹56 per share.
What was the minimum lot size for the Chatha Foods IPO?

The minimum lot size for the IPO was 2000 shares.
How much was the minimum investment required for retail investors?

Retail investors were required to invest a minimum of ₹112,000.
Who was the book running lead manager for the Chatha Foods IPO?

Indorient Financial Services Ltd served as the book running lead manager for the IPO.
Who was the registrar for the Chatha Foods IPO?

Skyline Financial Services Private Ltd was the registrar for the IPO.
What was the market maker for the Chatha Foods IPO?

Alacrity Securities acted as the market maker for the IPO.
How was the Chatha Foods IPO subscribed?

The Chatha Foods IPO was subscribed 19.28 times, with retail subscription at 14.60 times, QIB subscription at 8.54 times, and NII subscription at 44.52 times.
What are the main products of Chatha Foods Limited?

Chatha Foods Limited specializes in frozen food products for QSRs, CDRs, and the HoReCa segment, including chicken appetizers, meat patties, chicken sausages, sliced meat, and more.
What will the IPO proceeds be used for?

The net proceeds from the IPO are intended for setting up a proposed manufacturing unit and for general corporate purposes.
How does Chatha Foods Limited distribute its products?

Chatha Foods distributes its products through a network of 29 distributors covering 32 cities across India, catering to 126 mid-segment & standalone small QSR brands.
What is the financial performance of Chatha Foods Limited?

For the period ending September 30, 2023, Chatha Foods Limited reported a significant increase in revenue and profit after tax (PAT) compared to the previous fiscal year.
Who are the promoters of Chatha Foods Limited?

The promoters of Chatha Foods Limited are Paramjit Singh Chatha, Gurpreet Chatha, Gurcharan Singh Gosal, and Anmoldeep Singh.