Italian Edibles Limited, founded in 2009, is making its debut on the NSE SME platform with its IPO, aiming to raise ₹26.66 crores through the issuance of 3,920,000 shares at a fixed price of ₹68 per share. The IPO opened for subscription on February 2, 2024, and closed on February 7, 2024, with an expected listing date of February 12, 2024.
The company specializes in a variety of confectionery products under the brand OfCour’s and operates two manufacturing facilities in Indore, Madhya Pradesh. It has a significant presence across India and exports to countries like Nigeria and Yemen. The revenue for the year ending March 31, 2023, was ₹6,321.20 lakhs, with a profit after tax (PAT) of ₹264.21 lakhs, indicating a strong financial performance. The company’s return on net worth (RoNW) stands at an impressive 24.50%.
Italian Edibles’ market positioning is strong, with a comprehensive range of products catering to diverse tastes. It operates in a highly competitive sector, yet its focus on ethnic Indian tastes provides a unique selling proposition. The objectives of the IPO include setting up a new manufacturing unit, repaying borrowings, meeting working capital requirements, and covering general corporate expenses.
The company’s financial health appears stable, with a slight increase in total assets over the years and a decrease in total liabilities from 2021 to 2023. Its revenue, however, shows a fluctuation, with a dip in the latest financial year compared to the previous year. Despite this, the profit after tax has seen a significant increase, reflecting operational efficiency and potential for growth.
Regarding listing gains predictions based on Grey Market Premium (GMP), sentiments, and fundamentals, the detailed financial analysis and the company’s robust performance, especially the impressive PAT growth, suggest a positive outlook. However, it’s essential to consider the competitive landscape and the company’s ability to maintain its growth trajectory. The GMP and market sentiments closer to the listing date will also provide crucial insights into potential listing gains. Given these factors, investors might expect moderate to positive listing gains, contingent upon broader market conditions and investor sentiment at the time of listing.
It’s advisable for investors to conduct their due diligence, considering the IPO’s pricing in relation to its financial health, market position, and sectoral growth prospects. The detailed objectives of the IPO and the company’s strategic plans for growth and debt reduction are positive indicators, but the competitive nature of the confectionery sector and market dynamics should also be taken into account.