Goel Food Products Limited IPO

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i. Goel Food started as an Indian Snacks and Sweets Manufacturing Company. While being into the Indian snacks and sweets business for more than decade, they delt with various event management company to whom they provided services of marriage and other incidental services.

ii. The company opened its 1st banquet hall in Ultadanga, Kolkata and since then they have been growing in terms of presence in Kolkata. From one location they have expanded to four locations in Kolkata and currently the company have 8 banquets halls and 2 Indian sweets and snack shop and one hotel and one guest house.

iii. The company provide services such as organizing events like Marriages, Sangeet, Ring Ceremony, Birthday Parties, Anniversary Parties, Kitty Parties, Corporate Events, Kirtans (Devotional Singing), Thread Ceremony at their banquets hall and they serve Indian snack and Sweets at their retail shop. The company also generate rent income from its hotels and guest house. Apart from the event management business. The company operates only in one city i.e., Kolkata.

iv. At present they operate and manage banquet and Indian snacks and sweets shop business under the name “BIKA” at various locations in Kolkata.

Competitive Strengths:

  1. Strong Value Proposition
  2. Locational Advantage
  3. Low Set-up Cost
  4. Established brand and reputation
  5. Rich Management Experience
  6. Progressive Employer
  7. Quality Service

Objects of the Goel Food Products Limited IPO:

The IPO is combination of OFS and Fresh Issue. Company intends to utilize the Net Fresh Issue Proceeds for the following Objects: a) To Meet Working Capital Requirements b) General Corporate Purposes
DRHP of Goel Food Products Limited IPO

Goel Food Products Limited IPO Details:

Open Date: Jun 15 2022
Close Date: Jun 20 2022
Total Shares: 1,001,600
Face Value: ₹ 10 Per Equity Share
Issue Type: Fixed Price Issue
Issue Size: 7.21 Cr.
Lot Size: 1600 Shares
Issue Price: ₹ 72 Per Equity Share
Listing At: BSE SME

Promoters And Management:

i. Mr. Dinesh Goyal, Managing Director and Chairman Aged 48 years, is associated with the Company since 1996 as a Director and was further re-designated as Chairman and Managing Director of the Company for a period of 5 (five) years with effect from February 11, 2022 till February 10, 2027. Mr. Dinesh Goyal is a driving force behind the Company. He has Master’s Degree in Engineering from the University of South Carolina in the year 1998 and has a Bachelor’s Degree in Commerce from University of Calcutta in the year 1996. Having more than two decades of experience in the field of finance, management, strategy making, he handles the overall affairs of the Company. ii. Ms. Rashmi Goyal, Executive Director Aged 45 years, is the Executive Director of the Company. She has been on board of the Company since 2012 as Non-Executive Director. She was further re-designated as Executive Director with effect from February 26, 2022. She has more than 9 years of experience in operational and administrative work. She plays a vital role in planning, coordinating and managing all the administration procedures and responsible for day to day activity of the Company. iii. Mr. Yatharth Goyal, Non-Executive Director Aged 21 years, he is the youngest Director in the board of the Company. He was appointed as Non-Executive Director in the Company with effect from February 25, 2020. He has a Bachelor’s Degree in Commerce from St. Xavier’s College, Kolkata in the year 2021. Mr. Yatharth Goyal has knowledge, skills and experience of more than 1 year in the field of finance and management.

Financials of Goel Food Products Limited IPO:

Particulars (in Lakhs) Dec-21 Mar-21 Mar-20 Mar-19
Sales 1,173 713 1,548 1,326
Cost of Materials Consumed 419 218 675 486
Purchase of Stock 21 97 6 0.00
Employee Benefits Expense 82 66 110 126
Other Expenses 251 147 461 480
Operating Profit 398 184 294 234
OPM % 33.99% 25.91% 19.05% 17.65%
Other Income 27 40 58 59
Finance Cost 102 118 167 137
Depreciation 78 93 95 76
Profit before tax 245 5 90 80
Total Tax Exps 57 6 27 -67
Net Profit 187 -0.76 63 148
NPM % 15.99% -0.11% 4.08% 11.18%
No. of shares 37.72 37.72 37.72 37.72
EPS 4.97 -0.02 1.67 3.93

Comparison With Peers:

Name of the Company Sales (In Cr.) PAT (In Cr.) EPS PE RoCE Mcap (In Cr.) Returns 3Y Sales Growth (3Y)
Goel Food Products Ltd 15.65 2.50 6.63 10.86 4.93% 27 - 21%
TGB Banquets and Hotels Ltd. 26 -20 -6.96 - -11.60% 26 79% -68%
EIH Ltd 985 -97 -1.56 - -3.19% 8,167 -22% -46%
Note : Sales, PAT, and EPS are taken by annualising 9MFY22 data.

Recommendation on Goel Food Products Limited IPO:

Review and Recommendation of Goel Food Limited SME IPO by InvestorZone is 3/10 1. Company is involved in the business of providing services such as organizing events like Marriages, Sangeet, Ring Ceremony, Birthday Parties, Anniversary Parties, Kitty Parties, Corporate Events, Kirtans (Devotional Singing), Thread Ceremony at their banquets hall and they serve Indian snack and Sweets at their retail shop. The company also generate rent income from its hotels and guest house. They only operate in Kolkata. 2. Company has one hotel with 47 rooms and one guest house with 22 rooms, 2 Sweet shops and 8 Banquet Halls. 3. In FY19 they had a revenue of 14 Crores which increased to 16 Crores in FY20, then it fell to 7.53 Crores in FY21 due to COVID-19 and now, they are expecting to clock ~16 Crores in FY22. So, they have come at pre-covid level. 4. Company has clocked a 35% EBITDA Margins in FY22. In FY21, they had 22% EBITDA Margins. So, margins are good in the business and are increasing. 5. Despite revenue of 12 Crores in the first 9M of FY22, they are not able to generate positive cash flows. They have 8 Crores of negative cash in 9MFY22. The main reason is, they have given loans and advances of tune to ~11 Crores to related party. Actually, Goel Food has taken banquet halls from promoter i.e. Hilltop Healthcare Centre Ltd to use for their business. Hilltop Healthcare Center has taken loans from ICICI Bank for that property. Now, as Goel Food entered into the business activity to use the property , they have taken fresh loans from HDFC bank and retired the old ICICI bank loan. 6. Total outstanding shares after IPO would be 37.71 Lac and PAT of FY22(E) would be 250 Lac. So, EPS would be 6.62, and P/E is 11x, reasonable. 7. The problem in the IPO is promoters have transferred the loan liability of 11 Crores on the books of Goel Foods for using some of their Banquet halls before IPO. And, also taking charging facilitation fees for using their property. Moreover, 50% IPO is OFS, which is not a good sign for SMEs in general. 8. D/E is high of 3x.

Lead Manager of Goel Food Products Limited IPO:

  1. Gretex Corporate Services Private Limited

Registrar of Goel Food Products Limited IPO:

  1. Bigshare Services Private Limited

Company Address:

Goel Food Products Limited 76/1/2, Golaghata Road, Kolkata-700048 Phone: +91 89613 33312 Email: info@goelfood.com Website: https://bika.co.in/

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