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Srivari Spices and Foods IPO: GMP, Lot size and Price Band

Srivari Spices and Foods IPO: Srivari Spices and Foods Ltd, is an SME IPO on the NSE which is opening for subscription on 07th August 2023. Srivari Spices and Foods Ltd, was incorporated in the year 2019 to manufacture spices and flour (chakki atta). Its principal product categories include spices, masala and atta. While its spices get delivered to over 3,000 outlets, its atta gets delivered to more than 15,000 outlets. Its whole wheat and Sharbati atta are quote popular in the states of Andhra Pradesh and Telangana. Its predominantly uses organic methods with limited use of artificial preservatives and chemicals to retain the original flavour. It has a direct to customer (D2C) sales model as well as a business to business (B2B) marketing model to cater to institutional and corporate customers.

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The company has two production facilities at Ranga Reddy district, adjoining Hyderabad. The raw materials are sourced directly from the farmers and then processed at their manufacturing plants located near Hyderabad. In 2020, the company expanded its product portfolio to include sambar masala, chicken masala, garam masala and mutton masala. Sourcing the raw materials directly from the farmers gives the company a cost advantage. The company is also looking to expand its products into countries with a vast expatriate population, which would be a logical market extension to the domestic market. In terms of revenue contribution, spices contribute 79% of revenues and wheat flour 21%.

Srivari Spices and Foods IPO worth ₹9.00 crore comprises entirely of a fresh issue with no offer for sale (OFS) component in the IPO from promoters and early shareholders. The price band has been fixed in the range of ₹40 to ₹42 per share and the final price will be discovered in this band via book building. The fresh issue portion of the IPO entails the issue of 21.42 lakh shares which at the upper end of the price band at ₹42 is worth ₹9.00 crore. Since there is no OFS component in the IPO, the fresh issue size of ₹9.00 crore is also the size of the overall IPO.

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How to apply for the Srivari Spices and Foods IPO

Srivari Spices and Foods IPO has a face value of ₹10 and bidders can only bid in minimum lot size of 3,000 share each, entailing a minimum investment of ₹126,000 in the IPO at the upper end of the price band of ₹42 per share. That is also the maximum that a retail investor can bid in the IPO. HNIs, NIIs can bid for minimum of 2 lots of 6,000 shares entailing an investment of ₹252,000. The table below captures the lot sizes permissible.

ApplicationLotsSharesAmount
Retail (Min)13,000₹1,26,000
Retail (Max)13,000₹1,26,000
HNI (Min)26,000₹2,52,000

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As per the terms of the offer, 50% of the net offer is reserved for the qualified institutional buyers (QIBs), 15% of the offer is reserved for the HNI / NII investors and the balance 35% is reserved for the retail investors. It is a Book Built issue with the price band and the final price will be discovered through book building process. It is captured in the table below.

QIB Shares OfferedNot more than 50.00% of the Net offer
NII (HNI) Shares OfferedNot less than 15.00% of the Offer
Retail Shares OfferedNot less than 35.00% of the Offer

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Like in every SME IPO, Srivari Spices and Foods IPO also has a market maker. The Market maker typically provides buy and sell quotes post listing to ensure liquidity and low basis risk in the stock. In this case, the makers will be Nikunj Stock Brokers Ltd, who will act as the market maker for the Srivari Spices and Foods IPO SME. The company has set aside 108,000 shares for the market maker.

The issue opens for subscription on 07th August 2023 and closes for subscription on 09th August 2023 (both days inclusive). The basis of allotment will be finalized on 14th August 2023 and the refunds will be initiated on 16th August 2023. In addition, the demat credits are expected to happen on 17th August 2023 and the stock is scheduled to also list on 18th August 2023 on the NSE SME segment. This is the segment, in contrast to the mainboard, where IPOs of small and medium enterprises (SMEs) are incubated.

Srivari Spices IPO GMP

The shares of Srivari Spices are commanding a GMP in the range of Rs 20-23 in the grey market, according to websites that track activities in the unlisted market. This suggests that the shares of Srivari Spices and Foods may list with gains of 47-54 per cent.

Srivari Spices IPO price band

The Srivari Spices IPO has a price band of Rs 40-42 per share. The net proceeds from the IPO will be used to fund working capital requirements and for general corporate purposes.

Srivari Spices IPO lot size

The lot size, or the minimum number of shares that a bidder has to bid, on for this IPO is 3,000 equities. Srivari Spices IPO minimum investment At a lot size of 3,000 and the lower price band of Rs 40 per share, the minimum amount of money needed to bid on Srivari Spices and Foods IPO is Rs 1,20,000.

Srivari Spices IPO allotment date

The Srivari Spices IPO allotment finalisation is expected to happen on August 14. The refund for the non-allottees will be initiated on August 16,while the demat transfer is expected to happen on August 17.

Srivari Spices IPO listing date

The shares of Srivari Spices are expected to list on the exchange on August 18. The mandate will end on August 24.

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