Source: Money Control
Ganesh Consumer shares had a tepid opening on the stock exchange on Monday, making their debut at a discount to the share price set by the initial public offering (IPO). This listing demonstrates investor apprehension despite the IPO being oversubscribed.
Listing Information
On the NSE, the shares commenced trading at ₹296.05 per share, representing a decline of about 8% from the upper end of the IPO price band ₹306-322 per share. On the BSE, the stock is listed at ₹295, which represents a discount of 8.39%. After trading started, the market cap for Ganesh Consumer was ₹1,192.18 crore.
IPO Subscription and Anchor Investors
The IPO, which was open from September 22 to September 24, raised ₹408.8 crore and was subscribed 2.67 times in the primary market. This demonstrates adequate demand during the IPO period. In addition, the company previously raised over ₹122 crore with anchor investors, who are generally big institutional investors and commit to buying shares prior to the opening of the IPO for the individuals.
Utilization of IPO Proceeds
Ganesh Consumer will utilize the proceeds from the IPO for various purposes: ₹60 crore will be used to pay off debts, which would enhance the company’s balance sheet. An additional budget of ₹45 crore will be utilized for the creation of a new manufacturing facility for roasted gram flour and gram flour in Darjeeling. The remaining funds will be used to address general corporate purposes, which could include working capital, expansion, or other general corporate purposes.
They are a company with a rich history and product selection. Since 1936, Ganesh Consumer has been a trusted name in food and consumer goods. We offer a range of 42 products, including staples, spices, ethnic snacks, and newer food products. Over the years, we have established a presence in the packaged foods market and will continue to innovate our selection to appeal to today’s changing consumer preferences.
Market Reaction and Outlook
A weak listing at a discount indicates that investors are still wary despite the strong subscription during the IPO. Analysts advised it may have had to do with valuation concerns or uncertainty regarding the broader competitive consumer goods sector. Moreover, now the company will have to execute its expansion plans, especially with the new plant in Darjeeling, appropriately to continue growing.
While the stock market debut was unremarkable, Ganesh Consumer is firmly entrenched within the consumer goods industry. Investors will be eagerly monitoring the company in the next few months to see if it can offer growth and provide the rationale for the pricing of its IPO.
