Investing.com | Editor Pollock Mondal
Published November 15, 2023 at 1:22 am ET
Baba Food Processing, an agri-food manufacturing company, today witnessed a mixed debut on the SME platform of the National Stock Exchange (NSE). The shares opened at an issue price of Rs 76 but subsequently fell 5% to close at Rs 72.2. Despite this initial decline, the company’s shares still enjoyed a 13% premium to the gray market issue price.
The initial public offering (IPO), which launched on November 3 with a price band of Rs 72-76, aimed to raise Rs 33 crore by issuing around 43.42 lakh shares. On Sunday, the offering was heavily oversubscribed and attracted great interest from various investor groups. Retail investors subscribed 60 times their allocated quota, non-institutional investors subscribed 84 times and qualified institutional buyers showed strong demand by subscribing 147 times their quota.
The proceeds from the IPO will be earmarked for strategic investments in Panchakanya Foods Private Limited (PFPL), a wholly owned subsidiary of Baba Food Processing. The funds are intended for:
- Setting up a state-of-the-art manufacturing unit in Patna, Bihar, which will include a state-of-the-art automated roller mill and a chakki whole wheat atta mill.
- Expansion of the Company’s existing factory at Nagri, Ranchi, with machinery for manufacturing Chickpea Flour (Besan) and Roasted Chickpea Flour (Sattu).
- Repayment of certain unsecured loans to strengthen the company’s financial position.
Horizon Management acted as lead manager for the IPO while Mas Services Limited acted as registrar. Nikunj Stock Brokers has been appointed as market maker to ensure liquidity of stocks post listing.
The IPO performance comes amid other market activities including the successful debut of ASK Automotive and the expected IPO of Tata Technologies scheduled for November 22.
Investors have shown interest in Baba Food Processing as the company plays an important role in the agri-food sector, a key industry in the Indian economy. The company’s focus on expanding its manufacturing capabilities and product offerings may have contributed to the high subscription rates during the IPO.
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