Chatha Foods
Listing performance
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 19 Mar 2024 – 21 Mar 2024
- Listing date
- 27 Mar 2024
- Face value
- ₹10 per share
- Issue price
- ₹56 per share
- Lot size
- 2,000 shares
- Issue type
- Book Building issue
- Total issue size
- ₹33.39 Cr
- Market cap at offer price
- ₹126 Cr
- Promoter holding
- 81.36% → 59.80% pre-issue → post-issue
- ISIN
- INE0AH901011
- Registrar
- Skyline Financial Services Pvt.Ltd.
- Lead managers
- Indorient Financial Services Ltd.
- Registered office
- 272, Mota Singh Nagar, Jalandhar, Punjab
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 16,98,000 | — | — |
| Market maker | 3,00,000 | — | — |
Application size
Minimum 2,000 shares per lot, in multiples, at ₹56
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 2,000 | ₹1,12,000 |
| S-HNI (min) | 2 | 4,000 | ₹2,24,000 |
| S-HNI (max) | 8 | 16,000 | ₹8,96,000 |
| B-HNI (min) | 9 | 18,000 | ₹10,08,000 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Valuation and performance
Valuation at offer price
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 1.48 | 3.03 |
| P/E (×) | 37.84 | 18.48 |
| Price to book (×) | 3.68 | — |
| Market cap | — | ₹126 Cr |
Key performance indicators
- Return on net worth
- 14.54%
- ROCE
- 14.81%
- Debt / equity
- 0.39
- PAT margin
- 4.82%
- NAV per share
- ₹15.22
- Price to book
- 3.68
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Chatha Foods
Chatha Foods Limited is a frozen food processor incorporated in 1997 and converted to a public limited company in September 2023. The company manufactures processed and frozen non-vegetarian, vegetarian, and plant-based food products primarily for quick-service restaurants (QSRs), casual dining restaurants (CDRs), and hotel-restaurant-catering (HoReCa) segments. The company serves major clients including Domino's & Subway India franchises, Café Coffee Day, and Wok Express. As of September 30, 2023, the company had 37 customers served through a network of 29 distributors covering 32 cities across India. The company generates revenue through the sale of frozen food products, with its top five customers accounting for 93.29% of revenue for the six months ended September 30, 2023.
Company Analysis
from RHPChatha Foods Limited is a frozen food processor serving QSRs, CDRs and HoReCa players across India, operating in the processed and frozen food industry.
Chatha Foods Limited is a frozen food processor incorporated in 1997 and converted to a public limited company in September 2023. The company manufactures processed and frozen non-vegetarian, vegetarian, and plant-based food products primarily for quick-service restaurants (QSRs), casual dining restaurants (CDRs), and hotel-restaurant-catering (HoReCa) segments. The company serves major clients including Domino's & Subway India franchises, Café Coffee Day, and Wok Express. As of September 30, 2023, the company had 37 customers served through a network of 29 distributors covering 32 cities across India. The company generates revenue through the sale of frozen food products, with its top five customers accounting for 93.29% of revenue for the six months ended September 30, 2023.
Objects of the Issue
- Setting up the Proposed Manufacturing Facility at Village Tofhapur, Tehsil Dera Bassi, Distt SAS Nagar, Mohali, Punjab ₹2,411.03 lakhs p.22
- General Corporate Purposes p.22
- Setting up the Proposed Manufacturing Facility at Mohali, Punjab for production of Vegetarian Frozen RTE & RTC products ₹2,411.03 lakhs p.77
- General Corporate Purposes [●] p.82
- Development of the Proposed Manufacturing Facility for capacity expansion p.194
- General corporate purposes
Issue Structure
- Total Issue
- ₹3,400 lakhs (upto 59,62,000 Equity Shares)
- Fresh Issue
- Upto ₹3,400 Lakhs
- Offer for Sale
- Nil
- Price Band
- Floor Price: ₹53 per Equity Share (5.3 times face value); Cap Price: ₹56 per Equity Share (5.6 times face value)
- Lot Size
- 2,000 Equity Shares and in multiples of 2,000 Equity Shares thereafter
- Face Value
- ₹10 per Equity Share
Business Model
The company earns revenue from the production and sale of frozen, processed food products (non-vegetarian, vegetarian, and plant-based segments) to QSRs, CDRs, and HoReCa establishments. Distribution occurs through a network of 29 distributors covering 32 cities across India. The company manufactures products at its current facility in Village Chaundheri, Ambala Road, District Mohali, Punjab.
Business Segments
SWOT Analysis
- • Deep industry relationships with major QSR and HoReCa players(p.23)
- • Strong quality certifications and compliance standards(p.34)
- • Established distribution network across India(p.23)
- • Revenue growth trajectory from FY2021 to FY2023(p.38)
- • Diversified product portfolio across segments(p.20)
- • Strong customer base with leading QSR and CDR brands(p.111)
- • High-quality manufacturing facility with international certifications(p.111)
- • Experienced leadership with 25+ years in the industry(p.106)
- • Established supply chain and vendor relationships(p.110)
- • Strong revenue growth trajectory(p.106)
- • Diversified product portfolio across non-vegetarian, vegetarian, and plant-based categories(p.105)
- • Established relationships with major QSR customers over extended periods(p.117)
- • Modern manufacturing facility equipped with imported high-tech equipment(p.116)
- • Comprehensive quality assurance and food safety certifications(p.117)
- • Strong procurement and product development capabilities(p.113)
- • Long-term customer relationships with top QSR chains(p.119)
- • Multiple product certifications including FDA and BRCGS(p.130)
- • Largest supplier of frozen chicken products to major QSR chains(p.187)
- • Strong revenue growth trajectory with 24% CAGR(p.194)
- • Expanded customer base and product portfolio(p.194)
- • Positive return on net worth demonstrating operational efficiency(p.195)
- • Improved profitability with stronger EBITDA margins(p.195)
- • High customer concentration risk(p.32)
- • Dependence on a single product segment(p.20)
- • Geographic concentration of operations(p.20)
- • Negative historical cash flows(p.20)
- • Limited intellectual property protection(p.31)
- • Unregistered office and warehouse facilities(p.20)
- • Heavy dependence on promoter personal guarantees(p.20)
- • Heavy dependence on two major customers(p.105)
- • Limited customer base(p.106)
- • Lower current ratio indicating potential liquidity concerns(p.106)
- • Modest profitability margins(p.106)
- • High dependency on limited number of major customers(p.119)
- • Raw material costs constitute 72% of revenue, creating cost pressure(p.117)
- • Significant reliance on promoter personal guarantees for borrowings(p.141)
- • Vegetarian product segment has minimal history and revenue contribution(p.113)
- • Inadequate key man insurance for executive directors(p.120)
- • High dependence on few large customers(p.200)
- • Current ratio below 1.0 indicating working capital pressure(p.195)
- • Significant debt burden relative to equity(p.190)
- • High inventory levels relative to sales(p.180)
- • Lengthening cash conversion cycle(p.195)
- • Significant growth in Indian QSR market(p.23)
- • Expansion into vegetarian segment with new manufacturing facility(p.28)
- • Shift towards organized sector in QSR industry(p.23)
- • Global QSR market expansion potential(p.23)
- • Diversification through new product categories(p.37)
- • Expansion of distribution network to new markets(p.39)
- • Rapid growth of the QSR market in India(p.102)
- • Growing shift from unorganized to organized QSR sector(p.102)
- • Expansion into vegetarian and plant-based segments with strong growth potential(p.112)
- • Opportunity in tier II and tier III cities(p.103)
- • Young and growing population with rising disposable income(p.100)
- • International export potential(p.112)
- • Expansion into vegetarian and plant-based products with higher customer demand(p.113)
- • Capacity expansion through Proposed Manufacturing Facility at Mohali(p.113)
- • Retention and deepening of existing customer relationships(p.113)
- • Plant-based product category showing strong growth trajectory(p.113)
- • Expansion into Tier 1 and Tier 2 towns with growing QSR presence(p.194)
- • Growing demand for convenience foods driven by online delivery platforms(p.194)
- • Planned manufacturing facility expansion with 29 MT/day additional capacity(p.194)
- • Increasing product diversification into vegetarian and plant-based segments(p.195)
- • Private labelling and export market expansion opportunities(p.200)
- • Inability to obtain regulatory approvals for proposed facility(p.31)
- • Reliance on raw material suppliers without long-term contracts(p.36)
- • Exposure to food quality and safety compliance risks(p.34)
- • Intense competition from domestic and multinational players(p.37)
- • Volatility in raw material costs and supply(p.36)
- • Changing consumer preferences and market trends(p.37)
- • Dependence on power and water supply for operations(p.35)
- • Risk of natural disasters and external disruptions(p.41)
- • Dependence on QSR and HoReCa segment performance(p.109)
- • Vulnerability to changes in customer preferences and market trends(p.105)
- • Operational concentration at single manufacturing facility(p.105)
- • Competition from new QSR entrants and established players(p.103)
- • Customer concentration risk if major QSR chains reduce orders or shift suppliers(p.119)
- • Volatility in raw material prices and supply chain disruptions(p.117)
- • Regulatory compliance requirements for food safety and labeling(p.122)
- • Dependence on state electricity supply with power disruption risks(p.117)
- • Risk of insufficient insurance coverage for business interruption(p.120)
- • Competition from organized and unorganized sector players with better resources(p.119)
- • Dependence on QSR industry cyclicality and economic downturn sensitivity(p.200)
- • Inability to obtain regulatory approvals for proposed manufacturing facility(p.27)
- • Input cost volatility and raw material price fluctuations(p.196)
- • Intense competition in frozen food processing industry(p.200)
- • Risk of loss of major customers impacting revenue(p.187)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Paramjit Singh Chatha | Promoter | 25.67% | — |
| Gurpreet Chatha | Promoter | 21.00% | — |
| Gurcharan Singh Gosal | Promoter | 25.03% | — |
| Anmoldeep Singh | Promoter | 2.95% | — |
| Paramjit Singh Chatha | Promoter | 25.67% | [●] |
| Gurcharan Singh Gosal | Promoter | 25.03% | [●] |
| Gurpreet Chatha | Promoter | 21.00% | [●] |
| Anmoldeep Singh | Promoter | 2.95% | [●] |
| Paramjit Singh Chatha | Promoter and Chairman & Managing Director | 25.67% | — |
| Gurpreet Chatha | Promoter and Whole-time Director | 21.00% | — |
| Gurcharan Singh Gosal | Promoter and Whole-time Director | 25.03% | — |
| Anmoldeep Singh | Promoter | 2.95% | — |
| Paramjit Singh Chatha | Promoter/Managing Director | — | — |
| Gurpreet Chatha | Promoter | — | — |
| Gurcharan Singh Gosal | Promoter/Director | — | — |
| Iqbal Singh Chatha | Former Promoter (reclassified as non-promoter w.e.f 08/09/2023) | 10.5% | — |
Leadership
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.