Italian Edibles Ltd IPO

Italian Edibles Limited, established in 2009, is a confectionery manufacturer renowned for its OfCour brand, offering a variety of products such as Rabdi, milk paste, chocolate paste, lollipops, candies, jelly sweets, multigrain puffed buns, and fruit-based items. The company, based in Indore, Madhya Pradesh, serves a broad customer base, including Bakewell Biscuits Private Limited, Mamta Stores, Ma Laxmi Traders, Suria Distributor, and Chocolate World.

Italian Edibles Limited IPO is scheduled to be open for subscription from February 2, 2024, to February 7, 2024. Priced at Rs. 68 per share, the total issue size is Rs. 26.22 CR, with a 50% reservation for both retail and other investors. The IPO timetable includes the listing date of February 12, 2024.

The IPO's objectives include setting up a proposed manufacturing unit, repaying certain borrowings, meeting incremental working capital requirements, and general corporate expenses. Promoters, Mr. Ajay Makhija and Mr. Akshay Makhija hold 100% pre-issue promoter shareholding, which reduces to 73.47% post-issue.

First Overseas Capital Limited is the lead manager for the IPO. Compared to its peers, Italian Edibles Limited's IPO demonstrates stronger profitability and valuation. The evaluation of the P/E ratio suggests that the IPO's price range, with a P/E ratio ranging from 27.94x to 42.5x, seems highly undervalued compared to the industry average of 156.33x.

While the company has yet to pay dividends in past fiscal years, its strengths include a well-established brand name, a consistent focus on quality, strong relationships with suppliers, a wide sales and distribution network, a diversified product portfolio, and an experienced promoter and management team.

However, potential weaknesses such as the need to expand the existing distribution network, changes in segment contribution to revenue, unclear agreements with few suppliers, and ongoing legal proceedings pose risks. As of today, the Grey Market Premium (GMP) for Italian Edibles Limited IPO is Rs. 20. In conclusion, with its positive financial performance, diverse product range, and market reputation, Italian Edibles Limited presents an attractive IPO opportunity for potential investors.

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