Updated on: October 7, 2024 4:15 am GMT

Jeyyam Global Foods IPO: Insights into Subscription Success and Market Potential

The Jeyyam Global Foods IPO has made headlines as it opened up for subscription from September 2 to September 4, 2024. With a robust response from retail investors and keen interest from various segments, this initial public offering (IPO) has garnered significant attention in the stock market. Let’s delve deeper into the details surrounding this IPO, its financial metrics, and what it could mean for investors.

Overview of Jeyyam Global Foods Ltd.

Founded in 2008, Jeyyam Global Foods Ltd, formerly known as Kichoni Online Services Private Ltd, specializes in the production and processing of various chickpea products, particularly Bengali chickpeas (or “chana”), fried grams, and Besan flour. The company caters to a diverse clientele which includes major retail chains, hotels, supermarkets, caterers, and wholesalers.

Given the surge in healthy eating habits, the products offered by Jeyyam Global Foods are positioned well in the market. The company’s product range includes:

• Standard fried gram (split)
• Standard fried gram (whole)
• Jeyyam fried gram (split)

Recent reports indicated impressive financial performance, with sales increasing by 65% and profit after tax (PAT) growing by 92% from the previous fiscal year.

Key Details of the IPO

Subscription Timeline and Price Band

The subscription for the Jeyyam Global Foods IPO opened on September 2 and is set to conclude on September 4, 2024. The IPO has been priced in the range of ₹59 to ₹61, with a face value of ₹5. Investors can place a minimum bid for 2,000 shares, which means a minimum investment of approximately ₹1,22,000 at the upper end of the price band.

Offer Size and Structure

Jeyyam Global Foods is looking to raise a total of ₹81.94 crore through its public issue, which comprises:

• A fresh issuance of 12,088,800 equity shares (raising ₹73.74 crore)
• An offer-for-sale (OFS) of 13,43,200 equity shares (amounting to ₹8.19 crore)

The IPO will be available for subscription in different categories which include Qualified Institutional Buyers (QIB), Non-Institutional Investors (NII), and Retail Individual Investors (RII). The allocation of shares is expected to be:

• QIBs: 63,80,000 shares (with up to 38,28,000 as an anchor portion)
• NIIs: 19,14,000 shares
• Retail Investors: 44,66,000 shares

Subscription Status and Investor Demand

As of the second day of bidding, the Jeyyam Global Foods IPO had been subscribed 3.91 times overall. Notably, the retail portion was fully booked at 6.51 times, indicating strong demand from individual investors. Meanwhile, the NII category was subscribed 2.32 times, while the QIB segment showed bids for 63% of its share allocation. This underscores the investment community’s confidence in the company’s prospects.

On the first day, the IPO was approximately 67% subscribed, with retail investors applying for around 52.68 lakh shares against the reserved 44.66 lakh shares patch.

Financial Performance and Market Position

Jeyyam Global Foods has displayed remarkable growth in recent fiscal years. For the fiscal year ending March 31, 2024, the company’s revenue soared to ₹629.83 crore, up from ₹382.2 crore in the previous fiscal year—a 64% increase. The profit after tax also witnessed a substantial increase of 92%, rising to ₹15.09 crore from ₹7.86 crore in FY23. Such rapid growth in revenue and profitability showcases the company’s solid market position and effective operational management, especially in the competitive sector of food processing.

Grey Market Premium and Expected Listing Price

As of now, the grey market premium (GMP) for Jeyyam Global Foods IPO stands at ₹25. This indicates that the shares are being traded at a premium in the unofficial market, reflecting investors’ positive sentiment towards the company. With the upper end of the IPO price band at ₹61, the estimated listing price is projected at ₹86, which is about 40.98% higher than the issue price.

Potential Use of IPO Proceeds

The funds raised from the Jeyyam Global Foods IPO are intended for several purposes, including:

• General corporate purposes
• Capital expenditures
• Funding working capital requirements

This strategic allocation of funds is crucial for enhancing operational capabilities and scaling business to meet an increasing demand for processed food products.

Conclusion: A Promising Opportunity for Investors

The Jeyyam Global Foods IPO reflects a significant opportunity for investors looking to engage in the growing food processing sector. With robust financial performance, strong retail demand during the subscription period, and a promising market position, the company is poised for a successful listing.

Before making any decisions, potential investors should consider the overall market conditions and consult with financial advisors to gauge how this IPO fits within their individual investment strategies. The successful subscription and positive grey market sentiments suggest a favorable outlook for this IPO, making it an attractive proposition for those looking to diversify their portfolios into the food industry.

While we wait for the final results, investors should pay attention to what’s happening and be ready to change their plans based on market trends after the listing date, which is expected to be on September 9, 2024.