Prataap Snacks, the maker of Yellow Diamond Chips which is endorsed by actor Salman Khan, made a blockbuster debut on stock exchanges today. Its shares rose as much as 40 per cent to an intraday high of Rs 1,318.80 compared to its issue price of Rs 938. With 40 per cent listing gains, Pratap Snacks joins a league successful IPOs in 2017 which include Capacit'e Infraprojects, Dixon Technologies, CDSL, Hudco, Avenue Supermarts and Shankara Building Product.
The initial public offer (IPO) of Pratap Snacks, which ended on September 26, saw a robust subscription of 47 times. The portion reserved for institutional investors was subscribed 76.89 times while the segment reserved for non-institutional investors and retail investors saw subscription of 101.15 and 8.48 times respectively. Its Rs 480 crore IPO was a mix of fresh issue (Rs 200 crore) and offer for sale by existing investors.
Prataap Snacks' issue was priced in a band of Rs 930-938 per share. The company, which makes products under the 'Yellow Diamond' brand, aims to use the proceeds to expand capacity, marketing and brand building activities and retire the debt on its books.
According to Angel Broking, Pratap Snacks shares were issued at a steep valuation. At the upper end of the price band, Pratap Snacks shares were valued at 202 times its FY17 earnings, said Angel Broking.
However, despite steep valuation the issue got good response due to its strong growth prospects and earnings track record, say analysts. Pratap Snacks reported a revenue CAGR of 27 per cent during FY13-17.
Pratap Snacks shares closed 25.86 per cent higher at Rs 1,180.65 apiece compared to its issue price of Rs 938. (With agency inputs)