Chatha Foods Limited IPO

Chatha Foods Limited IPO Review

Chatha Foods Limited is coming up with an IPO worth INR 34 crores, consisting of a fresh issue of 59.62 lakh shares. The company plans to use the funds raised for a new manufacturing unit and general corporate purposes. 

Chatha Foods Ltd IPO – Important Dates

Chatha Foods IPO DateMarch 19, 2024 to March 21, 2024
Chatha Foods IPO Listing DateMarch 27, 2024
Chatha Foods IPO PriceINR 53 to 56 per share
Chatha Foods IPO Lot Size2000 Shares
Chatha Foods IPO Total Issue SizeINR 34 crores
Chatha Foods IPO Basis of AllotmentMarch 26, 2024
Chatha Foods IPO Initiation of RefundsMarch 27, 2024
Chatha Foods IPO Credit of Shares to DematMarch 27, 2024
Chatha Foods IPO Issue TypeBook Built Issue IPO
Chatha Foods IPO Listing AtBSE SME

Chatha Foods Limited IPO  – Company Profile

Founded in 1997, Chatha Foods Limited (CFL) is a frozen food processor, serving top QSRs (Quick Serving Restaurants), CDRs (Casual Dining Restaurants), and other players in the HoReCa (Hotel-Restaurant-Catering) segment.

 For six months ended September 30, 2023,

(i)Domino’s India franchise accounted for 44.41% 

(ii) Subway’s India franchise accounted for 27.09%,

(ii) Café Coffee Day accounted for 1.24%,

(iv) Chili’s & Pauls India accounted for 2.26%, 

(v) Wok Express accounted for 3.45% and

(vi) Burger Singh accounted for 0.76% of the revenue. In addition, the brands, which sell under “Chatha Foods,” are distributed through the network of 29 distributors covering 32 cities across India and catering to the needs of 126 segment & standalone small QSR brands.

All the products are produced at the manufacturing facility located in District Mohali. Reputed Indian public market investor Negen Undiscovered Value Fund invested in the Company in 2023 and holds a 10% stake. Paramjit Singh Chatha, Gurcharan Singh Gosal and Gurpreet Chatha being amongst the Promoters of the Company have recently increased their shareholding in the Company to 25.67%, 25.03%, and 21.00% respectively in 2023.

Chatha Foods IPO – Fundamental Analysis

Chatha Foods Ltd details reveal fluctuating revenue and expenses over three years, alongside consistent growth in equity and profitability. Improved financial ratios suggest enhanced operational efficiency and liquidity, reflecting a promising investment opportunity.

Revenue Growth

The company’s revenue has fluctuated over the three years, starting at ₹8,733.41 lakhs in 2022, peaking at ₹11,722.77 lakhs in 2023, then dropping to ₹7,077.86 lakhs by September 2023. These figures reflect changes in sales performance and market conditions.

Expense Increase

Operating expenses have followed a similar trend to revenue, starting at ₹8,636.11 lakhs in 2022, rising to ₹11,387.24 lakhs in 2023, and then decreasing to ₹6,602.15 lakhs by September 2023. These changes may reflect shifts in production costs or strategic spending.

Profitability Concerns

Profit after tax has seen substantial growth, starting at ₹104.20 lakhs in 2022, surging to ₹337.00 lakhs in 2023, and further increasing to ₹475.88 lakhs by September 2023. This demonstrates improved operational efficiency and revenue management.

Diluted EPS

Diluted earnings per share have shown steady growth, starting at ₹0.41 in 2022, increasing to ₹1.48 in 2023, and further rising to ₹2.06 by September 2023. This shows enhanced profitability and potentially effective capital management.

Return on Net Worth (RoNW): 

The return on net worth has shown an upward trend, starting at 3.55% in 2022, rising to 11.95% in 2023, and further increasing to 14.54% by September 2023. This reflects improved efficiency in utilizing shareholder funds to generate profits.

Net Asset Value (NAV) and Equity: 

Net asset value per equity share has steadily increased, from ₹11.67 in 2022 to ₹15.22 by September 2023. This suggests the company’s underlying asset value growth and potentially growing investor confidence.

Total Liabilities

Total liabilities have also increased over the three years, from an undisclosed figure in 2022 to ₹3,311.47 lakhs by September 2023. This indicates the company’s growing obligations, which could include debt, payables, and other financial commitments.

Chatha Foods Limited IPO  Financial Information

ParticularAs of 31 March 2022As of 31 March 2023As of 30 September 2023
Revenue (₹ in lakhs)8,733.4111,722.777,077.86
Equity (₹ in lakhs)1,929.932,175.122,516.15
Expenses (₹ in lakhs)8,636.1111,387.246,602.15
Profit and Loss After Tax (₹ in lakhs)104.20337.00475.88
Diluted EPS only (₹)0.411.482.06
Return on Net Worth (%)3.5511.9514.54
NAV per Equity Share (₹)11.6713.1515.22
Total Assets (in lakhs)4,830.315,141.945,827.62
Total Liabilities (in lakhs) 2,900.382,966.823,311.47
Debt Equity Ratio (in times) 0.570.490.39
Current Ratio (in times) 0.670.830.98

Chatha Foods Ltd IPO Peer Comparison

Chatha Foods Ltd IPO showcases its financial performance, revealing lower total income and profit after tax compared to its peer. However, it demonstrates a higher return on net worth and EPS, reflecting strong operational efficiency and profitability potential.

CompanyTotal Income(₹ in lakhs)PAT (₹ in lakhs)Face Value (₹)EPS (Basic) (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Chatha Foods Limited11,724.23245.20101.4811.9517.54
Tasty Bite Eatables Limited48,942.903,021.0010117.7312.41948.92

Chatha Foods IPO Objective

The main objective is to establish a new manufacturing unit in Mohali, Punjab, to meet the rising demand for Vegetarian Frozen RTE & RTC products, using INR 24.11 crores from IPO proceeds. Remaining funds will support general corporate goals.

  1. To set up a new manufacturing unit: To cater to the rapidly growing demand for Vegetarian Frozen RTE (ready-to-eat) & RTC (ready-to-cook) products, the company is setting up the proposed manufacturing facility at Mohali (Punjab). For the said purpose, the company plans to utilize INR 24.11 crores from the proceeds raised through IPO.
  1. General Corporate Purpose: The Company plans to deploy the balance funds towards the general corporate goals, including but not restricted to strategic initiatives, partnerships, joint ventures and strategic entity/business acquisitions, branding, marketing, and new client referral fees meeting exigencies.

Chatha Foods Limited IPO Risks And Challenges

Chatha Foods risks include heavy reliance on non-vegetarian product sales potential business and financial impacts from loss in this segment. Past negative cash flow may hinder future operations and growth plans. Quality control issues pose order cancellations, recalls, and product liability risks.

  1. The company derives a substantial portion of its revenue from the sale of products in the non-vegetarian segment. Any loss of business in this segment may adversely affect the business, results of operations, financial conditions, and cash flow.
  1. The company has reported negative cash flow in the past. Any negative cash flows in the future would adversely affect the cash flow requirements, which may adversely affect the ability to operate the business and implement the growth plans, thereby affecting the financial condition.
  1. The company is subject to stringent quality control requirements and any product defect issues or failure by or the suppliers to comply with quality standards may lead to the cancellation of existing and future orders, recalls, and exposure to potential product liability claims. 

Chatha Foods IPO – Industry & Market Potential

The global QSR market was valued at INR 25.05 Trn in FY 2022. It is expected to reach INR 54.53 Trn by FY 2027, expanding at a CAGR of ~17.41% during the FY 2023 ─ FY 2027 forecast period. The requirement for a wide variety of fast-food items and the growth of the market both contribute to the quick-service restaurant market’s expansion globally. 

The QSR market in India was valued at INR 171.90 Bn in FY 2022. It is expected to reach INR 431.27 Bn in FY 2027, expanding at a CAGR of ~20.47% during the FY 2022 ─ FY 2027 forecast period. 

The current decade is overseeing a shift to a larger organized sector. Customer retention and a higher range and depth of offerings are new goals among the organized market players of QSR. 

Chatha Foods Ltd IPO – Type of Offer

Chatha Foods Limited is launching an IPO valued at INR 34 crores, comprising 59.62 lakh new shares. The company intends to allocate the proceeds towards establishing a new manufacturing unit and for general corporate purposes.

Chatha Foods Ltd IPO Offer Size

The offer size of KP Chatha Foods Limited’s IPO is INR 34 crores.  The net proceeds will be used to set up a new manufacturing facility.

Chatha Foods IPO Allotment Structure

Chatha Foods’s allocation will be as follows: 50% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) according to SEBI regulations. A portion of the offer is reserved for market makers.

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

 ● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs. 

 ● Market Makers Reservations: A portion of the issue, up to 3,00,000 shares, is reserved for market makers.

How to apply for Chatha Foods Ltd IPO?

To apply for the Chatha Foods IPO through Alice Blue, you would typically follow these steps:

Open a Demat and Trading Account: If you don’t have one already, you must open a Demat and trading account with Alice Blue.

  1. Check for IPO Details: Once your account is active, you can check for the Chatha Foods IPO details in the IPO section of the Alice Blue platform.
  2. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
  3. Submit the Application: Confirm all your details and submit your application.

You can apply for the Chatha Foods IPO at Alice Blue in just a few clicks!

Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How do you check Chatha Foods IPO Allotment Status?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

  1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
  2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
  3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
  4. Select the Chatha Foods IPO: If you have applied for multiple IPOs, there might be a dropdown menu or a list where you can select the IPO you are interested in. Select the Chatha Foods IPO.
  5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, it’s recommended that you contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the Chatha Foods IPO:

 ● Registrar’s Website: Visit the website of Skyline Financial Services Private Limited, the registrar of the Chatha Foods IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

●  BSE SME: You can also check the allotment status on the official websites of the Bombay Stock Exchange (BSE) SME (Small Medium Enterprise) Platform. You would need your application number and PAN to check the status. 

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

Chatha Foods  Ltd IPO Offer Registrar

The registrar for the Chatha Foods Limited IPO is Skyline Financial Services Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

Skyline Financial Services Private Limited

D-153 A, 1st Floor, 

Okhla Industrial Area, Phase – I , 

New Delhi – 110 020, India. 

Email: [email protected]


Chatha Foods Limited IPO –  FAQs 

1. What is the allotment date of Chatha Foods Limited? 

The allotment date of the Chatha Foods Limited IPO is March 26, 2024.

2. What is the price band of the Chatha Foods IPO? 

The price band of the issue is INR 53-56 per share.

3. What is the size of the Chatha Foods IPO? 

Chatha Foods Limited is planning an IPO worth INR 34 crores, consisting of a fresh issue of 59.62 lakh shares. The company plans to use the funds raised for a new manufacturing unit and general corporate purposes.

4. What is the listing date of the Chatha Foods IPO? 

The listing date of Chatha Foods’s IPO is Mach 27, 2024.

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