Gujarat-based Gopal Snacks is in the process of preparing for its planned initial public offering in 2024. As part of this, it has attracted a secondary stake investment from a consortium composed of 360 One Asset, Axis Alternative Investment Fund, and White Oak Capital Management, as disclosed by two undisclosed individuals familiar with the transaction.
The pre-IPO transaction is valued at approximately INR 100 crore to INR 200 crore, with the funds earmarked to fulfill obligations stemming from a loan acquired by the founders in the previous year, as indicated by the aforementioned sources.
In December 2022, an article in Mint revealed that the founder Bipin Hadvani secured a debt of INR 490 crore from JM Financial for the purpose of acquiring his younger brother’s ownership stake in the company.
360 One Asset and Gopal Snacks have officially verified their pre-IPO investment in the company, although they have refrained from disclosing any further particulars.
“Our thesis is based on investing in strong market-leading brands that grow consistently along with profitability. The company has a strong focus on high quality and quantity at the right price and shown consistent growth with high profitability,” Sameer Nath, chief investment officer, head, Private Equity, 360 One Asset said in a statement.
Axis and White Oak have not promptly replied to a comment request.
360 One Asset, formerly known as IIFL Private Equity under IIFL Wealth and Asset Management Ltd, had previously made a successful investment in Bikaji Foods from its pre-IPO fund, resulting in favorable returns.
Gopal Snacks has also enlisted the services of two merchant banks to facilitate its readiness for a public listing. The company is actively working on filing a draft red herring prospectus in the upcoming months, with the timing of the listing contingent on market conditions, according to the first source mentioned.
“It is aiming to list before March 2024, as the market conditions may become harder after that because of the elections. A 2024 IPO is expected,” the second person added.
During an interview in December, Hadvani expressed the company’s ambition to pursue a public offering valued between INR 800 crore and INR 1,000 crore.
Additionally, as mentioned by the individuals quoted above, the funds generated from the IPO will be used to settle the remaining debt.
As per one of the sources mentioned, Gopal Snacks recorded approximately INR 1,400 crore in revenue for the fiscal year 2023, with a post-tax profit of around INR 113 crore.
Amongst other snack manufacturers, Bikaji Foods joined the public market in November 2022, while Prataap Snacks, known for its Yellow Diamond brand, made its debut on the stock exchange in October 2017.
Originally founded in 1991 as Gopal Gruh Udyog, the company, headquartered in Rajkot, rebranded itself as Gopal Snacks Pvt. Ltd in 2009. With a presence spanning Gujarat, Rajasthan, and Maharashtra, the company operates seven manufacturing plants. Gopal Snacks, boasting a workforce of over 4,000 employees, has the capacity to produce a remarkable 10 million packets daily. Their distribution network extends across 11 states, facilitated by a network of 750 distributors and over 700,000 retailers, as detailed on their website.