Chatha Foods Subscribed 1.25 Times On Day 1
The initial public offering (IPO) of frozen food processing company Chatha Foods began accepting subscriptions on March 19. On the first day of bidding, the small and medium company (SME) initial public offering (IPO) was subscribed more than 1.25 times.
The inception of Chatha Foods dates back to 1997, when the founding family, driven by their passion for food and a desire to share their family recipes, decided to establish a business that would honor their culinary legacy. The city, known for its vibrant food culture, served as the perfect backdrop for Chatha Foods' beginning.
Today, Chatha Foods stands as a testament to the family's dedication and hard work, continuing to thrive and expand while staying true to the core values that have shaped its success.
According to the company's reports, its financial performance has significantly improved, particularly in the first half of FY24, when it brought in Rs 3.42 crore on a total revenue of 70.78 crore. Due to the introduction of a new supply chain for vegetarian food, which has the potential to grow and profit the business, they suppressed the revenue in H1–FY24. They reported sales of Rs. 117.24 crore and net profit of Rs. 2.45 crore for FY23, demonstrating a notable improvement in both areas. Despite their strong financial results, they have now chosen to go public on the market.
On the first day of bidding, the Chatha Foods IPO was subscribed more than 1.25 times. On March 19, 53,26,000 applications were received for the SME IPO against 42,64,000 shares.
On the first day of bidding, the retail category had a 1.40 subscription rate, while the QIB and NII parts had 0.87 and 1.36 subscription rates, respectively.
Chatha Foods IPO Details
Issue Date: March 19, 2024, to March 21, 2024.
Listing Date: March 27, 2024.
Face Value of Shares: INR 10 per share.
Price Band: INR 53 to INR 56 per share.
Lot Size: 2000 Shares.
Total Issue Size: 5,962,000 shares (aggregating up to ₹34 Cr).
Fresh Issue: 5,962,000 shares (aggregating up to ₹34 Cr).
Issue Type: Book Building IPO.
Listing At: BSE SME.
Retail Shares Offered: 1,982,000 (33.24%).
QIB Shares Offered: 1,132,000 (18.99%).
NII (HNI) Shares Offered: 8,50,000 (14.26%).
Chatha Foods, renowned for its distinctive culinary offerings, stands out in the food industry. Its unique features include a diverse range of authentic, traditional recipes that have been passed down through generations, ensuring an original taste that's hard to find elsewhere. The use of high-quality, locally sourced ingredients supports sustainability and provides a fresh, natural flavor to their dishes. Moreover, Chatha Foods' commitment to health is evident in its menu options, which include organic and gluten-free choices catering to various dietary needs. Their innovative approach to fusion cuisine also allows for creative combinations of flavors and textures, making each meal an exciting culinary adventure.
Chatha Foods' Competitive Landscape
Chatha Foods operates in the dynamic and competitive Indian frozen food market. Here's a breakdown of their key competitors:
Major Players:
Preparedfoods: A strong competitor with a wide range of frozen parathas, idlis, and other Indian staples. They might have a wider product portfolio compared to Chatha Foods.
MTR Foods: A well-established brand known for its extensive range of ready-to-eat meals, snacks, and instant mixes. MTR Foods might have a stronger presence in the household consumer segment compared to Chatha Foods' focus on QSRs.
Foods Pacific: A prominent player, particularly on the West Coast of the United States, specializing in Indian frozen parathas and other flatbreads. They might be a strong competitor for Chatha Foods in the export market.
Other Notable Competitors:
Savoury Systems: Offers a variety of frozen Indian snacks and appetizers, potentially competing with Chatha Foods for a share of the QSR appetizer market.
iD Fresh Food: Known for their fresh dosa batter and paratha dough, they might target a different customer segment than Chatha Foods' fully prepared frozen meals.
Kohinoor Foods, Gits, Maiyas: These established brands offer various Indian staples like basmati rice, pulses, and pickles. They might be indirect competitors, but could compete for shelf space or consumer loyalty.
ITC, McCain Foods, Capital Foods, Priya Foods, Bakkavor: These larger companies might have a broader frozen food portfolio, including non-Indian options, potentially posing indirect competition.
Competitive Advantages for Chatha Foods:
Focus on QSRs: Chatha Foods' strong distribution network caters to major QSR chains, providing consistent quality and supply for their menus.
Specialization: Their focus on Indian flatbreads like parathas might give them an edge in this specific market segment.
Brand Recognition: As a publicly traded company, Chatha Foods might benefit from increased brand awareness and potential for wider distribution.
Challenges and Considerations:
Dependence on QSRs: Their reliance on a few major QSR chains could be risky if buying patterns change.
Competition: The Indian frozen food market is crowded, and established players like MTR Foods have a wider product range.
Innovation: Keeping their product offerings innovative and catering to evolving consumer preferences will be crucial for long-term success.
Conclusion
Investors looking to diversify their portfolio with a piece of the food business will find Chatha Foods' initial public offering (IPO) to be an intriguing prospect. The company is well-positioned for future success because to its strategic growth plans and strong financial performance. As with any investment, there are dangers involved, but considering Chatha Foods' significant market share and dedication to innovation, the possible gains appear bright. When assessing this IPO, investors are recommended to carry out extensive due research and take their long-term investing objectives into account.
Please read the detailed IPO related information Here.
Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.
FAQs
Q: What is an IPO?
An Initial Public Offering (IPO) is the process by which a privately held company offers its shares to the public for the first time. It allows the company to raise capital by selling shares to investors and get listed on a stock exchange.
Q: How can I apply for an IPO?
To apply for an IPO, follow these steps:
Open a Demat account with a registered Depository Participant (DP).
Choose the IPO you want to apply for.
Fill out the IPO application form through your broker or online platform.
Specify the number of shares you wish to apply for and the price range (if it’s a book-building issue).
Q: What is ASBA (Application Supported by Blocked Amount)?
ASBA is a payment method for IPOs where the bid amount is blocked in your bank account until the allotment process is complete. It ensures that you have sufficient funds to cover the shares you applied for.
Q: Can I make payments through UPI for an IPO?
Yes, you can use the Unified Payments Interface (UPI) to apply for an IPO. Many banks and brokers allow UPI-based payments during the IPO application process. Make sure your UPI ID is linked to your bank account.
Q: What is the difference between a fixed price issue and a book-building issue?
Fixed Price Method: The company determines a fixed price for issuing shares, and investors know the exact price before the IPO.
Book Building Method: The company offers a price range, and investors bid within that range. The final price is determined after the bidding process.
Q: What is the difference between the floor price and cut-off price in a book-building issue?
Floor Price: The lowest price at which an investor can bid within the price range.
Cut-off Price: An option where investors bid at the highest price (or cap price) without specifying a bid amount. They receive the allotment at the final determined price.
Q: What does ‘DP name’ mean in an IPO online form?
DP Name: It refers to the name of your Depository Participant (DP) with whom you hold your Demat account. You need to provide this information while applying for an IPO.
Q: What are the different investor categories in an IPO?
RII (Retail Individual Investor): Individual investors who apply for a small number of shares.
NII (Non-Institutional Investor): High-net-worth individuals, corporate bodies, and trusts.
QIB (Qualified Institutional Buyer): Institutional investors like mutual funds, banks, and foreign institutional investors.
Anchor Investors: Institutional investors who invest before the IPO opens for subscription.
Q: How is the allotment process done in an IPO?
The allotment process considers various factors, including investor categories, oversubscription, and the price at which bids are placed. The final allotment is based on demand and availability of shares.
Q: What happens if I don’t get the full allotment of shares in an IPO?
If the number of allotted shares is less than what you applied for, the excess funds are refunded to your bank account. You’ll receive the allotted shares, and any remaining funds will be returned.
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