HOAC Foods Listing: Stock makes stellar market debut, lists at 206% premium at ₹147
Hariom Atta & Spices (HOAC Foods India) had a strong market debut with shares opening at ₹147 on NSE SME, a premium of 206% over the issue price. The IPO received exceptional subscription of 2,013.64 times, aiming to use proceeds for working capital and general purposes.
Hariom Atta & Spices (HOAC Foods India) made a decent market debut today, as its shares opened at ₹147 each on NSE SME, indicating a premium of 206% over the issue price of ₹48.
The SME IPO, valued at ₹5.54 crore, was open for subscription from May 16 to May 21, 2024, at a price of ₹48 per share. It consisted solely of a fresh issue of 1,155,000 shares, without any offer-for-sale component. The company proposes to use the net issue proceeds towards working capital requirements and general corporate purposes.
The IPO received an exceptional response from all sections of investors, with a staggering subscription rate of 2,013.64 times. The market capitalisation of the Hariom Atta & Spices IPO is ₹18.45 crore, according to Chittorgarh.
Hariom Atta & Spices specialises in manufacturing a range of products, including flour (chakki atta), herbs & spices, unpolished pulses, grains, and yellow mustard oil, which are marketed under the brand name “HARIOM” through Exclusive Brand Outlets in and around Delhi-NCR.
It carefully sources raw materials from different parts of the country and processes them without artificial preservatives or chemicals, resulting in an organic product portfolio known for its freshness and purity, as stated in its DRHP report.
This business model has enabled the company to tap into a niche market segment in the Delhi-NCR region and build a loyal customer base since its inception. The primary aim has always been to produce high-quality natural spices and food products without synthetic substances.
To achieve this, the company has developed a manufacturing and packaging strategy that ensures products remain fresh until the end of their shelf life, reducing waste and offering a diverse range of fresh and wholesome products.
The company operates through an extensive franchise network consisting of 4 company-owned outlets and 6 franchisee-owned outlets, totaling 10 Exclusive Brand Outlets exclusively selling its products, as highlighted by the company in the DRHP.
The company, according to Dilip Davda, the contributing editor at Chittorgarh, is operating in a highly competitive and fragmented segment. It posted an average financial performance for the reported periods.
Based on FY24 annualised earnings, the issue appears fully priced. Small equity capital post-IPO indicates a longer gestation period for migration. Well-informed/cash surplus investors may park moderate funds for the medium term, said Dilip Davda.
In terms of financial performance, the company reported revenues from operations of ₹1,148.59 lakhs for the nine months ended December 31, 2023, and for the financial years ending in Fiscals 2023, 2022, and 2021, they were ₹1,208.56 lakhs, ₹1,087.27 lakhs, and ₹742.26 lakhs, respectively.
Profit After Tax (PAT) for the nine months ended December 31, 2023, and the financial years ending in Fiscals 2023, 2022, and 2021 amounted to ₹74.50 lakhs, ₹58.79 lakhs, ₹27.33 lakhs, and ₹12.85 lakhs, respectively, as per the DRHP report.
Disclaimer: We advise investors to check with certified experts before taking any investment decisions.
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