Gopal Snacks shares: Should you buy the stock after a muted D-St debut?

Shares of Gopal Snacks Ltd had a soft landing at Dalal Street on Thursday but the company saw some low level buying after a muted debut. Shares of Gopal Snacks were listed at a discount of 12.72 per cent at Rs 350 on BSE and a discount of 12.47 per cent on NSE at Rs 351, over its issue price of Rs 401 apiece.

The post-listing gains were kept in check after soured sentiments for broader markets and flop show by recent listings. Gopal Snacks shares tested lows of Rs 342 on its maiden trading session taking the overall cuts close to 15 per cent over issue price. However, it scaled highs of Rs 384.95, recovering 12.55 per cent from day's low.

After the soft listing, investors are confused if they should enter the stock at current levels, which is below the issue price or the stock may fall further amid the volatile market sentiments. Also, the allottees are looking to protect their capital amid the sentiments for the primary markets.

Gopal Namkeen witnessed a disappointing debut on the stock market, listing at Rs 352 per share. This negative listing performance falls short of pre-listing expectations and raises concerns about investor sentiment, valuation, and the company's growth prospects in the competitive snack food market, said Shivani Nyati, Head of Wealth at Swastika Investmart.

"The IPO price might have been perceived as too high considering the company's growth trajectory and the competitive landscape. Broader market conditions and investor cautiousness towards food companies might have dampened enthusiasm," she added. "Investors are advised to carefully consider their risk tolerance and long-term investment goals before staying put."

The IPO of Gopal Snacks  ran between March 6 and March 11. The company had offered its shares in the fixed price band of Rs 381-401 per share with a lot size of 37 shares. The company raised a total of Rs 650 crore from its primary offering, which was entirely an offer-for-sale (OFS) of up to 1,62,09,476 equity shares by its promoters and other shareholders.
 
The issue was overall subscribed a little more than nine times. The quota for qualified institutional bidders (QIBs) was booked 17.50 times. The quota for non-institutional investors was subscribed 9.50 times. The portions reserved for retail investors and employees saw bidding for 4.01 times and 6.88 times, respectively.
 
Gopal Snacks also became the victim subdued secondary market scenario and continued selling pressure in the mid & smallcaps, listing can be on a flat to muted note. The soft listing seems to be justified as the offer was 100 per cent OFS and no funds would be coming into the company for growth, said Prashanth Tapse, Senior VP (Research), Mehta Equities.

"We believe this listing gives an opportunity to investors to accumulate the growth story for the long term. Hence, considering all the parameters we recommend allotted investors to 'hold' and those investors who missed and wish to add can accumulate Gopal Snack at any dip post listing for long term perspective only," he said.

Incorporated in 1999, Gopal Snacks is an FMCG firm specializing in both ethnic and Western snack items, catering to markets in India and worldwide. Their product range encompasses a diverse selection, featuring traditional offerings like namkeen and gathiya alongside contemporary options such as wafers, extruded snacks, and snack pellets.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.