Chatha Foods makes strong market debut, shares list at 30% premium to issue price

Frozen and ready-to-eat food processor Chatha Foods Ltd made a dream market debut on Wednesday with its shares listing at a premium of 30% to the issue price.

Chatha Foods shares opened for trading at ₹73 per share against the issue price of ₹56 per share on the SME platform of BSE, showing remarkable gains of 30.35%.

Shares gained a further 5% from the listing price to trade at ₹76.65 per share at 10.45 AM. More than 12 lakh shares changed hands in early trade. The turnover was ₹9.13 crore while market capitalisation stood at ₹172.44 crore.

Jalandhar-based Chatha Foods Ltd launched the initial public offering on March 19 to raise around ₹34 crore from public investors. The IPO, a book-built issue, consisted of a fresh issue of 59.62 lakh shares and no OFS component. The price band was ₹53 to ₹56 per share.

At the close of the bidding on March 21, the ₹34-crore public issue of frozen foods products maker Chatha Foods was booked 19.78 times driven by a strong response from non-institutional investors. Chatha Foods Ltd announced IPO share allotment on Tuesday, March 26.

Exchange data showed that bids for 7.64 crore shares were garnered against 39.64 lakh equity shares on offer. The qualified institutional buyers’ portion was subscribed 8.54 times as bids for over 96 lakh equity shares were received against 11.32 lakh equity shares on offer.

Non-institutional buyers’ category was booked a huge 44.52 times with applications for 3.78 crore equity shares dropping in against 8.5 lakh equity shares on offer. The retail investors’ portion was subscribed 14.60 times. Applications for 2.89 crore shares were received against 19.82 lakh equity shares on offer.

IPO Objective

The company has proposed to utilise around ₹24.11 crore of the IPO proceeds for financing the construction of a manufacturing facility at Mohali in Punjab.

The company, which makes ready-to-eat non-vegetarian and vegetarian food products, plans to set up a new facility in Mohali at a total cost of nearly ₹31 crore to cater to the rapidly growing demand for Vegetarian Frozen ready-to-eat and ready-to-cook products.

About Chatha Foods Ltd

Founded in 1997, Chatha Foods Ltd is in the business of frozen, ready-to-eat non-vegetarian and vegetarian food products. It serves top Quick Serving Restaurants, Casual Dining Restaurants and Hotel-Restaurant-Catering players.

The company produces frozen foods at its facility at Mohali in Punjab. The facility has a capacity of 7,839 MT for frozen food products over two shifts on an annual basis.

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