Chatha Foods IPO

Chatha Foods Limited, a prominent player in the frozen food industry, embarked on its Initial Public Offering (IPO) journey with a book-built issue aiming to raise Rs 34.00 crores. This financial move was facilitated through the fresh issue of 59.62 lakh shares. The bidding for this IPO commenced on March 19, 2024, and concluded on March 21, 2024, marking a significant step for the company towards listing on the BSE SME platform. The tentative date set for this milestone was March 27, 2024.

Key Highlights of Chatha Foods IPO

• 1. IPO Dates: March 19, 2024, to March 21, 2024.
• 2. Listing Date: Tentatively scheduled for March 27, 2024.
• 3. Issue Type: Book Built Issue IPO.
• 4. Price Band: ₹53 to ₹56 per share.
• 5. Minimum Lot Size: 2000 shares, translating to a minimum investment of ₹112,000 for retail investors.
• 6. Issue Size: A total of 5,962,000 shares, aggregating up to ₹34.00 crores.
• 7. Book Running Lead Manager: Indorient Financial Services Ltd.
• 8. Registrar: Skyline Financial Services Private Ltd.

IPO Allocation and Subscription Details

The IPO offered a structured allocation across various investor categories:

• 1. QIB: 1,132,000 shares (18.99%)
• 2. NII (HNI): 850,000 shares (14.26%)
• 3. RII: 1,982,000 shares (33.24%)
• 4. Anchor Investors: 1,698,000 shares (28.48%)

The IPO witnessed robust interest, culminating in a subscription rate of 19.28 times. The breakdown of this subscription rate across categories was as follows:

• 1. QIB: 8.54 times
• 2. NII: 44.52 times
• 3. Retail: 14.60 times

About Chatha Foods Limited

Established in 1997, Chatha Foods Limited has carved a niche in the frozen food sector, supplying a diverse range of products to Quick Serving Restaurants (QSRs), Casual Dining Restaurants (CDRs), and other players within the Hotel-Restaurant-Catering (HoReCa) segment. The company's product lineup spans chicken appetizers, meat patties, chicken sausages, sliced meat, toppings, fillers, and more, totaling over 70 meat products. Operating under the brand name Chatha Foods, it has established a distribution network that spans 29 distributors covering 32 cities across India.

Financial Performance

Chatha Foods Limited has shown commendable growth in its financial performance. The year ending March 31, 2023, saw a 34.14% increase in revenue and a significant 264.66% surge in profit after tax (PAT) compared to the previous fiscal year.

Objectives of the IPO

The net proceeds from the IPO are earmarked for setting up a proposed manufacturing unit and for general corporate purposes, positioning Chatha Foods for further growth and expansion.

Investment Consideration

With a strong footprint in the frozen food industry and a robust growth trajectory, Chatha Foods Limited presents a promising investment opportunity. The IPO, though perceived as fully priced based on FY24 annualized earnings, reflects the company's confidence in sustaining growth momentum, particularly with an increased focus on the vegetarian segment. Investors looking for medium to long-term rewards may find Chatha Foods an attractive option as it expands its operations to cater to both B2B and B2C models.