Dindigul Farm IPO fully Subscribed on day one due to strong retail and NII demand; Check GMP and key Specifications

The Dindigul Farm Products IPO opened for subscription on Thursday, June 20 and will close on Monday, June 24. The lot size for Dindigul Farms IPO is 2,000 shares. The price band is set between ₹51 and ₹54 per equity share, with a face value of ₹10.

Founded in 2010, the company specializes in processing whole and skim milk to produce dairy products such as milk protein concentrates, skimmed milk powder and dairy whitener. Its 15-acre processing plant is located in Dindigul. The products are marketed under the brand names ENNUTRICA and Activeday, which cater to a wide range of customers in various sectors.

In the financial year 2022-23, the company sold products in 15 states in India and three countries internationally. According to the Red Herring Prospectus (RHP), the company plans to expand its global presence by entering additional ASEAN and European markets.

Listed Peers:

Dodla Dairy Ltd (P/E: 29.36)
Parag Milk Foods Ltd (P/E: 11.55)
Modern Dairies Ltd (P/E: 3.61)

Financial Performance:

FY21: Total Income – ₹18.41 crore, Net Loss – ₹4.62 crore
FY22: Total Income – ₹28.45 crore, Net Loss – ₹4.17 crore
FY23: Total Income – ₹81.99 crore, Net Profit – ₹5.17 crore
FY24 (up to December 23, 2023): Total Income – ₹68.77 crore, Net Profit – ₹5.89 crore

Analysis:

Significant growth in income and profits starting FY23.

Concerns about the sustainability of this growth due to the highly competitive and fragmented nature of the dairy segment (source: chittorgarh.com).

Dindigul Farm IPO Subscription Status

Overall Subscription: 2.29 times
Retail Portion: Subscribed 3.82 times
NII Portion: Subscribed 1.75 times
Qualified Institutional Buyers: Yet to be booked
Bids Received: 98,10,000 shares against 42,90,000 shares on offer (as of 12:39 IST, according to chittorgarh.com)

IPO Overview

The Dindigul Farms IPO, valued at ₹34.83 crore, involves a fresh issue of 6,450,000 equity shares of face value ₹10 each, with no offer for sale. The funds raised will be used for capital expenditure, working capital requirements and general corporate purposes.

Beeline Capital Advisors Pvt Ltd acted as book running lead manager for Dindigul Farms IPO, Link Intime India Pvt Ltd acted as registrar. Spread X Securities has been appointed as the market maker for the IPO.

Dindigul Farm IPO GMP today

Dindigul Farm IPO GMP or grey market premium is +70. This indicates Dindigul Farm share price were trading at a premium of ₹70 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, Dindigul Farm IPO expected listing price was indicated at ₹124 apiece, which is 129.63% higher than the IPO price of ₹54.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.