Gopal Namkeen IPO Review: Gopal Namkeen is coming up with its IPO issue of Rs. 650 Cr which will open on 6th March 2024. The issue will close on 11th March and be listed on the exchange on 14th March 2024. So, in this article we will analyze and understand the Gopal Namkeen limited IPO Review with its Financials, GMP and more…. Keep reading to find out!

Gopal Namkeen IPO Review – About The Company

Established in 1999, Gopal Namkeen is a Fast Moving Consumer Goods Company offering ethnic, western snacks and other products. The Company has a presence in 523 locations across 10 states and 2 Union Territories. 

The ethnic snacks include namkeen and gathiya, western snacks include wafers, extruded snacks, and snack pellets. The Company sells papad, spices, gram flour noodles, rusk, and soak papdi in the FMCG range. In addition, they also engage in third-party manufacturing of chikki, nachos, noodles, rusk, soan papdi, and washing bars.

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Gopal Namkeen Ipo Review - product portfolio logo
Source: RHP of the Company

Currently, the Company operates 6 manufacturing facilities comprising three primary and three ancillary facilities. The primary facilities are located in Nagpur, Maharashtra, and Gujarat. These facilities focus on manufacturing the finished products. 

The ancillary facilities are primarily focused on producing gram flour, seasoning, raw snack pellets, and spices. The primary facility has an annual installed capacity of 3.03 Lakh MTPA and an ancillary facility of 1.01 Lakh MTPA.

Additionally in a step towards greater vertical integration, the Company manufactures and installs goods containers on its distributor vehicles by itself. It has an engineering and fabrication facility in Gujarat for the same. 

As of FY23, Gopal is the fourth-largest brand in the organized sector of ethnic savories and the largest manufacturer of gathiya in terms of sales and volume. The Company has a 20% market share in ethnic savories and 6% in Gujarat’s papad industry.

Gopal Namkeen IPO Review – About The Industry

The Indian packaged food industry was valued at ₹ 2.97 Lakh Cr in 2018 and will reach Rs. 4.6 Lakh Cr in 2023. The segment is expected to grow at a CAGR of 10% from FY23 and would reach a market value of Rs. 6.7 Lakh Cr by 2027. 

Surging demands for high-value, pre-packed ‘on-the-go’ and ‘ready-to-eat’ products is supported by increasing disposable income, rising population of urban middle-class consumers, and increasing population of working women across the country.   

Dairy products along with snacks and sweets together contribute to approximately 71% of the overall packaged food segment followed by Biscuits and Snack bar holding approximately 15% of the overall market share. The image below shows category wise consumption of packaged food is in India and how is it estimated to change by FY27.

Gopal Namkeen IPO Review – About The Industry logo
Source: Invest India, Frost & Sullivan Analysis

The Indian packaged food industry is dominated by unorganized players. The unorganized sector dominates the industry accounting for a market share of approximately 81% in FY23. It is estimated that the unorganized sector’s market share would drop to approximately 79% in FY27 although it will continue to grow at the rate of 9% CAGR during this period.

Meanwhile, the organized sector is projected to grow at the rate of 13%, supported by major transition that took place during the COVID-19 pandemic which influenced the retailers in the country to adopt technology to support their businesses. 

Gopal Namkeen IPO Review – Financials

Gopal Namkeen reported revenue from operations worth Rs. 1395 Cr in FY23, which increased by just 3% from Rs. 1352 Cr in FY22. Nevertheless, from FY21 the Company’s revenue was just Rs. 1129 Cr, which has grown at 11% CAGR till FY23.

Although revenue performance was quite dismal, the Company’s margins have expanded from just 5.35% EBITDA margin in FY21 to 14.07% in FY23. This is due to consistent reduction in raw material costs, which is down from 81% of revenue to just 71% in FY23.

Due to this, Net profits of the Company have climbed from Rs. 42 Cr in FY22 to Rs. 112 Cr in FY23, growing by a whopping 171% in a year. Since FY21, net profits have increased by 131% CAGR.

Due to the rising profitability and a low reserve base, we see that Return on Equity has climbed up from 15.56% in FY21 to 39% in FY23. The Company has also deleveraged its balance sheet reducing its debt-to-Equity ratio to just 0.37x. Due to which ROCE has increased to 43%.

Gopal Namkeen IPO Review – Key Players 

Bikaji Foods and Pratap Snacks are the two listed peers of Gopal Namkeen who earned a revenue fo Rs. 1966 Cr and Rs. 1652 Cr respectively. What is shocking is that the revenue growth of the peers has been 22% and 18.4% while Gopal Namkeen’s revenue growth was just 3%.

However, in terms of Gross Profit margins Gopal and Pratap snacks maintain gross profit margins in the 28% range, while bikaji slightly outperforms them with 29%.

Nevertheless when it comes to return on Net worth, Gopal Namkeen outperforms with a RONW of 39%, as compared to just 14% and 3% of other Companies.

Gopal Namkeen, at the higher end of the price band of Rs. of Rs. 401 with a basic EPS of Rs. 9.02 as of FY23 will be valued at a Price-to-Earnings of 44.5x. Although it might seem like a sky high PE, it is a lot cheaper than its peers who trade at PE of 105x and 138x. 

Gopal Namkeen IPO Review - Key players
Source: RHP of the Company

Strengths Of Gopal Namkeen 

  1. Excellent brand recognition: The Company enjoys a leadership position in the Indian ethnic savory market, with a significant presence in Gujarat. The Company has spent decades building a strong brand for itself in the rather unorganized industry of Indian snacks. 
  2. Diversified Portfolio: The Company has diversified away from just namkeen and Gathiyas and has built its presence in the western snack space. To capture the strong established market for Western snacks, the company manufactures wafers, extruded snacks, and snack pellets.
  3. Growing popularity of Gathiya: The primary product manufactured by the Company is Gathiya. The product has been receiving increased traction across India allowing the company to expand its brand across the nation, particularly in the states of Uttar Pradesh, Maharashtra, Rajasthan, and Madhya Pradesh.
  4. Strategic located manufacturing facilities: The manufacturing facilities in Gujarat are located close to the raw material production bases to reduce storage & logistics costs. Even the final product manufacturing is done close to the major markets of the Company. 
  5. Vertically integrated business operations: The Company controls the production process by operating the manufacturing process of the raw material as well as the fixed goods. Alongside, it also builds customized containers with required cooling solutions to run the business on an efficient scale.

Weaknesses Of Gopal Namkeen

  1. Product Concentration Risk: Although the Company offers fast moving goods like the western snacks, papad, Besan and other spices, the Company is still a manufacturer of Ethnic snacks which contributes to ~59% of revenue.
  2. Requirement to maintain high quality standards: Since the company is into the consumable FMCG category, it will be subjected to high food & safety standards. Any improper usage of foods or contamination can bring upon legal action on the Company, risking reputation and financial harm.
  3. No Fresh Issue: The entirety of the of the Rs. 650 Cr issue will be an offer for sale and no proceeds will reach the Company. Due to this, there will be no direct benefit to the company itself and it will only benefit the company’s promoters
  4. Under-utilization of resources: The Company’s manufacturing capacity has been on a consistent downward trend dropping from 40% in FY21 to just 28% as of FY23. Such low capacities could throw signs that the company has overestimated while in reality, the demand for its products is a lot lesser.
  5. History of alleged misbranding: From FY20-FY22 the Company has received 8 notices from the respective state Food Safety boards relating to alleged misbranding of its products.

Gopal Namkeen IPO Review – GMP

The shares of Gopal Namkeen Ltd traded at a 29.93% premium in the grey market on 4th March 2024. The shares in Grey Market traded at Rs 521, so this gives it a premium of Rs 120 per share over the cap price of Rs 401.

Gopal Namkeen IPO Review – Key IPO Information

IPO SizeRs. 650 Cr
Fresh Issue-
Offer for Sale (OFS) Rs. 650 Cr
Opening date6 March 2024
Closing date11 March 2024
Face ValueRs. 1
Price BandRs. 381 - 401
Lot Size37 Shares
Minimum Lot Size1 Lot (37 Shares)
Maximum Lot Size13 Lots (481 Shares)
Min. InvestmentRs. 14,837
Listing Date14 March 2024

Promoters: Bipinbhai Vithalbhai Hadvani, Dakshaben Bipinbhai Hadvani and Gopal Agriproducts Ltd

Book Running Lead Manager: Intensive Fiscal Services Pvt Ltd, Axis Capital Ltd, and JM Financial Ltd

Registrar to the Offer: Link Intime India Pvt Ltd

The Objective Of The Issue

The entire IPO will be an offer for sale, which will allow promoters to achieve a profitable exit on their shares.


Gopal Namkeen, a predominantly strong brand in the North western parts of India is a leader in the ethnic snacks segment. Although a huge chunk of Company’s revenue comes from the sale of Gathiya and Namkeen, the Company is diversifying its presence in to western snacks like wafers, pellets etc.

The company enjoys good profitability and return ratios, revenue growth of nearly muted last year. To add to this, the capacity utilization of its manufacturing facility failed to touch even 30%. These might bee some of the serious points to consider before considering investing into Gopal Namkeen.  

Overall, Gopal Namkeen’s IPO is yet a new entrant to the sprouting snacks industry and it is currently dominated by western snacks. But the presence of Companies like Gopal along with its competitors are steadily reclaiming their share of what India snacks on.

With everything we have pointed out in Gopal Namkeen IPO review, what do you think about Gopal Namkeen? Would you be willing to bet on the Company with its PE in the 40x? Let us know in the comments below.

Written by Nasir Hussain

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