Baba Food Processing’s stock had a subdued start on the NSE, debuting at the IPO price of INR 76 on November 15. Following its listing, the stock experienced a 5 percent decline, settling at INR 72.2 on the SME platform of the exchange.
Baba Foods’ shares were commanding a 13 percent premium in the grey market, an unofficial ecosystem where shares are traded before allotment and up until the listing day. Investors commonly monitor the grey market premium (GMP) to gauge expectations for the listing price.
The offering garnered strong investor interest, witnessing a subscription rate of 69 times. The retail segment was oversubscribed by 60 times, non-institutional investors showed substantial demand with an 84 times oversubscription, and qualified institutional buyers took the lead by subscribing 147 times their allocated quota.
The Baba Food Processing IPO opened for subscription on November 3 and closed on the 7th. The price band for the issue was fixed at INR 72-76 per share. Through the IPO, the company raised INR 33 crore. The offer consisted entirely of a fresh issue of 43.42 lakh shares.
The funds generated will be directed towards investing in the wholly owned subsidiary, Panchakanya Foods Private Limited (PFPL). The objective is to establish a state-of-the-art, highly automated roller flour mill, and chakki whole wheat atta mill in Patna, Bihar.
The generated funds will be allocated for acquiring machinery to produce chickpea flour (Besan) and roasted gram flour (Sattu) at its current manufacturing facility in Ranchi. Additionally, a portion or the entirety of specific outstanding unsecured borrowings obtained by the company will be prepaid or repaid using the proceeds.
Horizon Management served as the book-running lead manager, Mas Services Limited acted as the registrar, and Nikunj Stock Brokers functioned as the market maker for the offering.
Baba Food Processing operates as an agro-food manufacturing company, producing a diverse array of items such as whole wheat atta (wheat flour), refined flour (maida), tandoori atta, and semolina flour (sooji). With a current manufacturing facility in Nagri, Ranchi, the company is in the process of establishing an additional unit in Patna, Bihar.
