Chatha Foods Lists at 30% Premium at Rs 73 per share on BSE and Hits Upper Circuit

Chatha Foods Limited (CFL) is a frozen food processor. The company offers frozen food products to top Quick Service Restaurants (QSRs), Casual Dining Restaurants (CDRs), and other players in the Hotel-Restaurant-Catering segment, debuted on the Indian stock market today.

The stock of Chatha Foods Limited (CFL) opened at Rs 73 per share on the BSE, indicating an impressive 30% premium over the final issue price of Rs 56 per share. The market capitalization on the BSE stands at Rs 172.44 crore. Furthermore, the company’s shares hit an upper circuit price limit of 5% today post-listing in the markets.

IPO Proceeds

The company aims to use the Net Proceeds from the Fresh Issue for the Setting up of the proposed manufacturing facility and for General corporate purposes.

Business Overview

Incorporated in 1997, Chatha Foods Limited (CFL) is a frozen food processor. The company offers frozen food products to top QSRs (Quick Service Restaurants), CDRs (Casual Dining Restaurants), and other players in the HoReCa (Hotel-Restaurant-Catering) segment. Chatha Foods’ product portfolio includes Chicken Appetizers, Meat Patties, Chicken Sausages, Sliced Meat, Toppings & Fillers, and more. The company produces more than 70 meat products. The company sells products under Chatha Foods and distributes through a network of 29 distributors covering 32 cities across India, catering to the needs of 126 mid-segment & standalone small QSR brands. The company serves top QSRs, CDRs, and other players in the Hotel-Restaurant-Catering segment such as Domino’s & Subway’s India franchise, Café Coffee Day, Wok Express, etc.

Subscription details

On March 21, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 19.28 times. The public issue received remarkable interest, with the retail category being subscribed 14.60 times, while the DII and NII categories reached a subscription rate of 8.54 and 44.52 times respectively.

The IPO price band was Rs 53 and Rs 56, with a face value of Rs 10 per share and a lot size of 2000 shares. The total size of the company’s IPO was Rs 34 crore, and the final share issue price was fixed at Rs 56 each.

Conclusion

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have already earned 37% (after 5% upper circuit) on the listing day itself and can put a stop-loss below the intraday low price or can book the profits. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.