Gopal Snacks Ltd IPO

Its position in the Indian snack food market as an ethnic savouries brand with a significant presence in Gujarat coupled with our focus on quality and various offerings have helped us create a brand recognition.

Diversified product portfolio capable of capturing growing Indian snacks market.

Its position as a manufacturer of gathiya in India coupled with the growing popularity of gathiya as a snack, present opportunities for the company to expand in the gathiya segment.

Strategically located manufacturing facilities.

Vertically integrated advanced business operations resulting in quality products and cost and operational efficiencies.

Distribution network.

Experienced Promoter and management team.

Track record of profitable financial performance.

The company is significantly dependent on the sale of its products namely, namkeen, gathiya and snack pellets. The company aggregate revenue from sale of namkeen, gathiya and snack pellets accounted for 88.96%, 85.25%, 81.66%, 83.24% and 77.89% of its revenue from operations in Fiscal 2021, 2022, 2023 and the six months ended September 30, 2022 and 2023, respectively. An inability to anticipate and adapt to evolving consumer tastes, preferences and demand for particular products, or ensure product quality may adversely impact demand for its products, brand loyalty and consequently the companys business, results of operations, financial condition and cash flows.

The sale of its products is concentrated in the company core market of Gujarat. In Fiscal 2021, 2022 and 2023 and the six months ended September 30, 2022 and 2023, its revenue from sale of products in Gujarat accounted for 74.31%, 76.27%, 79.08%, 79.06% and 76.49% of its revenue from operations, respectively. Any adverse developments affecting its operations in such region, could have an adverse impact on the companys business, financial condition, results of operations and cash flows.

Its cost of materials consumed accounted for 81.87%, 79.39%, 71.62%, 72.99% and 70.02% of itsrevenue from operations in Fiscal 2021, 2022 and 2023 and the six months ended September 30, 2022and 2023, respectively. Inadequate or interrupted supply and price fluctuation of its raw materials and packaging materials could adversely affect its business, results of operations, cash flows and financial condition.

Its Promoter Group does not include Prafulchandra Vitthal Hadvani (earlier known as PrafulbhaiVitthalbhai Hadvani), brother of Bipinbhai Vithalbhai Hadvani, one of its Promoters and hisConnected Entities (as defined below) and this Draft Red Herring Prospectus does not include anydisclosures pertaining to Prafulchandra Vitthal Hadvani and his Connected Entities.

Its Promoters have encumbered their Equity Shares by way of pledge. Any exercise of such encumbrance could dilute the shareholding of its Promoters and consequently dilute the aggregate shareholding of its Promoters, which may adversely affect the companys business and financial condition.

An inability to maintain or enhance the popularity of its Gopal brand may adversely impact itsbusiness, results of operations, financial condition and cash flows.

The company is dependent on the sale of small pack SKUs for its revenues. Revenue from sale of SKUs available at Rs. 5 accounted for 82.68%, 80.74%, 75.48%, 77.31% and 70.41% of our revenue from operations in Fiscal 2021, 2022 and 2023 and the six months ended September 30, 2022 and 2023, respectively. Any significant increase in the cost of raw materials, packaging, or other commodities used in the production of these SKUs may lead to inflationary pressures and its inability to either increase the prices of the company SKUs or reduce the weight may have an adverse effect on its business, results of operations, financial condition and cash flows.

Its business is dependent on the company distribution network. An inability to expand or effectively manage its distributor network, or any disruptions in the company distribution network may have an adverse effect on its business, results of operations, financial condition and cash flows.

Its operations are subject to various contamination related risks, including improper storage of the company products and raw materials, labelling errors, and non-compliance with quality control standards. Any actual or alleged contamination could lead to legal liability, damage to brand reputation, and adverse impact on its business, results of operations, financial condition and cash flows.

Any slowdown or interruption to its manufacturing operations or under-utilization of the company existing or future manufacturing facilities may have an adverse impact on its business, results of operations, financial condition and cash flows.