Shanthala FMCG Products LTD. IPO - Review, Valuation & GMP

Shanthala FMCG Products - Complete Overview

Founded in 1996, Shanthala FMCG Products Limited serves as a prominent distributor of FMCG for major FMCG companies in India. The company's distribution encompasses a wide range of products, including branded packaged foods, personal care items, education and stationery products, matches and agarbatti, as well as tobacco products.

Shanthala FMCG Products Limited holds the official distributorship for ITC, handling the distribution of their branded beauty and well-being products, nutrition, personal care, and home care items.

Additionally, It also distributes oil, sugar, and atta for M. K. Agrotech Pvt. Ltd., sold under its brand name Sunpure.

In the fiscal year 2023, the company achieved a revenue of Rs. 4,077.25 lakhs.

 

What does the company do? 

Shanthala FMCG Products Limited serves as a distributor of FMCG products for prominent FMCG companies in India.

 

 

IPO Overview

The Shanthala FMCG Products Limited IPO date is scheduled to take place from October 27, 2023, to October 31, 2023. This SME IPO is expected to be listed on November 8, 2023.

The Shanthala FMCG Products Limited IPO price has been set at Rs. 91 per share, with the total issue size of the upcoming SME IPO amounting to Rs. 16.07 Crores.

For this IPO, a single lot comprises 1200 shares, and retail investors are allowed to bid for a maximum of one lot. The company has allocated 50% of the shares to retail investors and the remaining 50% to other types of investors.

 

Shanthala FMCG Products Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	27 October 2023
IPO Closing Date	31 October 2023
IPO Allotment Date	3 November 2023
Refund initiation	6 November 2023
IPO Listing Date	8 November 2023

 

Shanthala FMCG Products Limited IPO Details 

IPO Opening & Closing Date	27 October to 31 October 2023
Face value	Rs.10 per Share
Issue Price	Rs. 91 per Share
Lot Size	1200 Shares
Price of 1 Lot	Rs. 109,200
Issue Size	1,766,400 Shares (aggregating up to Rs. 16.07 Cr)
Offer for sale	NA
Fresh issue	1,766,400 Shares (aggregating up to Rs. 16.07 Cr)
Listing at	NSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Bigshare Services Pvt. Ltd.

 

Shanthala FMCG Products Limited IPO Lot Details 

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Shanthala FMCG Products Limited IPO Reservation

Other Investors Share Portion	50%
Retail Investors Share Portion	50%

 

Company Financial

Amount in Lakhs

Period	31 Mar 2023	31 Mar 2022	31 Mar 2021
Total Assets	657.21	615.79	569.67
Total Revenue	4,077.25	3,254.57	3,955.67
PAT	17.73	4.52	14.41
Net worth	143.22	125.49	120.97
Reserve & Surplus	93.22	75.49	70.97
Total Borrowings

 

Breakup of revenue from sale of ITC products: 

(Amount in Lakhs)

Type of Products	FY 2021	FY 2022	FY 2023
Tobacco products	2044.89	1816.35	2529.78
Non-Tobacco products	665.94	537.10	709.98
Total	2710.83	2353.45	3239.76

 

Objective of the Issue 

The company will  utilize the Net Proceeds to fulfill following purposes:

• Supporting increased working capital needs.
• Addressing general corporate requirements.

 

Promoters and Management of Shanthala FMCG Products Limited

B. Manjunath Mallya, Shobitha Malya, Sneha Vinayak Kudva, and Yogish Mallya are the promoters of the company.

Pre-issue Promoter Shareholding
Post-issue Promoter Shareholding	59.71%

 

Peer Comparison

In India, there are no publicly listed companies involved in a business comparable to that of the company.

 

IPO's Valuations

We can evaluate the IPO valuation by leveraging the data provided in the company's DRHP. Shanthala FMCG Products Limited IPO price has been set at Rs. 91 per share and an EPS of Rs. 3.55, based on the issue price, the P/E ratio is 25.66.

 

Dividend Policy

According to the Shanthala FMCG Products Limited IPO DRHP, the company has not issued dividends in the past, and any potential future dividend payments will be based on the company's financial performance.

 

IPO's Strengths 

• Preferred Distributor.
• Wide-ranging Product Distribution.
• Seasoned Promoters and Management Team with Robust Industry Knowledge and Proven Success.
• Enduring and Robust Customer Relationships.

 

IPO Weaknesses

• Several pending legal proceedings involve the Promoter and Promoter Entities.
• The company's involvement in the distribution of tobacco products is subject to stringent health and safety laws, as well as stricter consumption policies, which could impact the company's operations.
• The company relies on a limited number of suppliers for its business. 
• For certain products, the company is reliant on a small number of customers.
• The company must secure and renew various registrations, licenses, and permits from government and regulatory authorities.
• The company operates in a highly competitive market which could adversely affect its business. 
• The company's business is concentrated in one geographic area, specifically the Coorg district in Karnataka.
• The company has encountered multiple instances of delays in filing statutory returns in the past.
• Negative cash flows have been experienced by the company in previous periods.

 

 

IPO GMP Today

Shanthala FMCG Products Limited IPO GMP is not yet available.

 

Conclusion

The company operates within a competitive market and has faced negative cash flows in the past. Despite its distribution to prominent multinational corporations, the company's profit margins do not appear particularly remarkable. To achieve the best outcomes, investors should consider a thorough analysis before applying for the issue.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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