Chatha Foods Limited IPO

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Founded in 1997, Chatha Foods Limited (CFL) has established itself as a leading frozen food processor in India, catering primarily to Quick Serving Restaurants (QSRs), Casual Dining Restaurants (CDRs), and the broader Hotel-Restaurant-Catering (HoReCa) segment. With a deep connection to the Indian food services and dining out industry, CFL has become a pivotal player, with significant revenue contributions from major franchises and its own brand distributed across India.

Business Model and Operations:

CFL operates through Concept Manufacturing, Concept Sharing Manufacturing, and its own brand sales, focusing on stringent control over raw ingredient procurement, manufacturing, inventory, and distribution across India. Advanced IT system integration enhances decision-making and operational efficiency.

Diversified Product Portfolio:

CFL offers Non-Vegetarian, Vegetarian, and Plant-Based products, meeting the diverse needs of the QSR, CDR, and HoReCa sectors. Since venturing into vegetarian and plant-based mock meat products in 2022 and 2021 respectively, CFL’s range includes plant-based sausages, salami, and Indian snacks. It also partners with conglomerates like Bluetribe, Shaka Harry, Green Bird, and Plantaway for branded product distribution.

Clientele, Distribution, and Quality Assurance:

Chatha Foods Limited (CFL) serves major franchises like Domino’s and Subway, and reaches 126 mid-segment QSRs through a 29-distributor network across 32 cities. Emphasizing innovation and quality, CFL’s products are backed by certifications from the U.S. FDA and BRC, produced in a facility with a 7,839 MT annual capacity.

Objects of the Chatha Foods Limited IPO:

The Issue Proceeds from the Fresh Issue will be utilized towards the following objects: 1. Setting up the Proposed Manufacturing Unit 2. General Corporate Purposes
DRHP of Chatha Foods Limited IPO
RHP of Chatha Foods Limited IPO

Chatha Foods Limited IPO Details:

Open Date: Mar 19 2024
Close Date: Mar 21 2024
Total Shares: 5,962,000 shares
Face Value: ₹ 10 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 34 Cr.
Lot Size: 2000 Shares
Issue Price: ₹ 53 to ₹56 Per Equity Share
Listing At: BSE SME
Listing Date: Mar 25 2024

Promoters And Management:

1. Paramjit Singh Chatha, aged 55 years, is the Chairman, Managing Director and Promoter of our Company. He has been associated with our Company since inception and was elevated as the Managing Director of the Company with effect from April 1, 1998. He has completed his higher secondary education. He has over 25 years of experience in frozen and ready-to-eat processed food industry and has been actively involved in planning and formulating the overall business and commercial strategy and developing the Company’s business. 2. Gurcharan Singh Gosal, aged 74 years, is the Whole-time Director of our Company. He has been associated with our Company since October 1, 2001 in the capacity of an Executive Director. He holds Bachelor of Arts degree in Economics from Panjab University, Chandigarh. He has approximately 47 years of work experience in the business of food and food related items. Prior to joining our Company, during the period from 1976 to 1994, he was the president of various food chains in Canada. 3. Gurpreet Chatha, aged 45 years, is the Whole-time Director and Promoter of our Company. He has been associated with our Company since August 30, 2004 in the capacity of an Executive Director. He has completed his higher secondary education. He has around 20 years of experience in the frozen and ready-to-eat processed food industry and has been actively engaged in the purchase and supply chain section of the Company.

Financials of Chatha Foods Limited IPO:

Particulars ( In Lakhs )
2021
2022
2023
6M-FY24
Revenue from Operations 6,118 8,733 11,723 7,078
Other Income 1 7 1 0.2
Total Revenue 6,119 8,740 11,724 7,078
Cost of materials consumed 4,697 6,400 8,889 5,278
Changes in inventory 106 -64 -204 -139
Employees Benefit Expenses 673 903 1,060 616
Other Expenses 846 1,056 1,271 663
EBITDA -204 446 709 660
Depreciation & Amortisation 261 261 275 141
Finance cost 89 81 97 43
EBIT -464 185 434 519
OPM (%) -3.33% 5.10% 6.05% 9.32%
PBT -553 104 337 476
Tax -153 37 92 135
PAT -400 67 245 341
NPM (%) -6.54% 0.77% 2.09% 4.82%
No.of Shares 224.96 224.96 224.96 224.96
EPS 1.77 0.29 1.08 1.51

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
Chatha Foods Limited 117 2 1.08 51.4 56 126
Tasty Bite Eatables Limited 476 30 117.73 66.9 12,542 3,218
* All the data is as per FY23.

Recommendation on Chatha Foods Limited IPO:

Review and Recommendation of Chatha Foods by team IZ is 4/10. 1. Founded in 1997, Chatha Foods Limited (CFL) is a key player in India's frozen food industry, serving Quick Serving Restaurants (QSRs), Casual Dining Restaurants (CDRs), and the broader HoReCa sector. With its own brand, "Chatha Foods," the company extends its reach through 29 distributors across 32 cities, supporting 126 mid-segment and small, standalone QSR brands. 2. Business Model and Operations :- CFL's business model is multifaceted, encompassing concept manufacturing, concept sharing manufacturing, and own brand sales. This model is supported by an efficient business infrastructure that emphasizes strict control over raw ingredient procurement, manufacturing operations, inventory management, and distribution logistics across India. Integrated information technology systems ensure seamless operation and informed decision-making. 3. Product Portfolio :- The product portfolio spans three main categories: Non-Vegetarian, Vegetarian (introduced in 2022), and Plant-Based (introduced in 2021). This diversified range caters to the evolving preferences of consumers, including leading QSRs, CDRs, and other HoReCa segment players, and is also supplied under various brand names like Bluetribe, Shaka Harry, and Green Bird. 4. Competition Landscape :- Operating in a sector with both organized and unorganized players, CFL faces competition across the spectrum. Despite this, the company's strategic focus on quality, innovation, and customer service positions it strongly against both small unorganized sector players and larger entities with substantial resources. 5. The Revenue has Increased from Rs.61 Crore in FY21 to Rs.117 Crore in FY23. 6. The EBITDA has Increased from (-2) Crore in FY21 to 7 Crore in FY23. 7. The PAT has Increased from (-4) Crore in FY21 to 2 Crore in FY23. 8. As per FY23, CFO/EBITDA is 1.03, As per FY24, EPS is 3.03, 9. Market Capitalization is 126 Crore & P/E is 18.47x based on FY24.

Lead Manager of Chatha Foods Limited IPO:

  1. Indorient Financial Services

Registrar of Chatha Foods Limited IPO:

  1. Skyline Financial Services Private Ltd

Company Address:

Chatha Foods Limited 272, Mota Singh Nagar, Jalandhar – 144 001 Punjab, India Phone: + 91 18146 16381 Email: cs@cfpl.net.in Website: http://www.cfpl.net.in/

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