NeoPolitan Pizza and Foods Limited is gearing up for its Initial Public Offering (IPO) from September 30, 2024, to October 4, 2024. The company operates primarily in the Quick Service Restaurant (QSR) sector, specializing in Neopolitan-style pizzas and trading in agricultural commodities. With a focus on quality and sustainability, NeoPolitan aims to enhance the dining experience while also engaging in agricultural trading.
Let’s delve into the details of the IPO and evaluate if it’s a sound investment opportunity.
NeoPolitan Pizza and Foods IPO Details
- Bidding Dates: September 30, 2024 – October 4, 2024
- Minimum Investment: ₹1,20,000
- Lot Size: 6,000 shares
- Price Range: ₹20 per share
- Total Issue Size: ₹12.00 Crore
- Listing Date: October 9, 2024
- Face Value: ₹10 per share
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About NeoPolitan Pizza and Foods
Founded in 2011, NeoPolitan Pizza and Foods operates in two main segments: the restaurant industry, specifically through its QSR model, and the trading of agricultural commodities. The restaurant segment focuses on Neopolitan-style pizzas, offering a diverse menu that caters to various dietary preferences, including gluten-free and vegetarian options.
Strengths of NeoPolitan Pizza and Foods
- Food Safety Certification: The company is ISO 22000:2018 certified, ensuring it adheres to high food safety management standards.
- Diverse Menu Offerings: NeoPolitan has rebranded its restaurant experience, providing a wide variety of dishes, including pizzas, salads, and desserts, appealing to a broad customer base.
- Global Expansion: The company has invested in a wholly-owned subsidiary in the U.S., indicating its intent to broaden its global footprint.
- Growing Network: As of March 31, 2024, NeoPolitan operates 21 restaurants across 16 cities and Union Territories in India, showcasing its expanding presence.
- Direct Sourcing: The company sources agricultural commodities directly from farmers, emphasizing sustainability and quality in its supply chain.
- Strong Revenue Growth: NeoPolitan has demonstrated consistent revenue growth, with revenue from operations increasing significantly over the past few years.
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Financial Performance
Here’s a snapshot of NeoPolitan Pizza and Foods’ financial performance:
| Fiscal Year | Revenue (₹ Cr) | Profit (₹ Cr) | Total Assets (₹ Cr) |
|---|---|---|---|
| FY22 | 16.29 | 0.18 | 13.01 |
| FY23 | 20.03 | 1.17 | 18.11 |
| FY24 | 44.00 | 2.11 | 20.40 |
The company has shown promising growth in both revenue and profit, indicating a positive trend in its operations.
Risks and Challenges
Despite its strengths, NeoPolitan Pizza and Foods faces several risks:
- Regulatory Compliance: The QSR segment is subject to stringent food safety regulations. Non-compliance could result in negative publicity and loss of customer trust.
- Franchise Reliance: The success of the franchise model depends on the performance of third-party franchisees. Poor performance or failure to maintain brand standards can harm the company’s reputation.
- Supply Chain Risks: The agricultural trading segment is vulnerable to supply chain disruptions, affecting product availability and pricing.
- Customer Concentration: A significant portion of revenue comes from a small number of customers. Loss of any key customer could adversely affect the company’s financial stability.
- Supplier Concentration: The company relies on a limited number of suppliers for agricultural commodities. Any disruptions or loss of these suppliers could negatively impact operations.
- Geographical Risk: A large portion of sales is concentrated in Gujarat. Any socio-political or economic developments in the region could disrupt business operations.
Key Performance Indicators (KPI) as of March 31, 2024
- Return on Equity (ROE): 13.23%
- Return on Capital Employed (ROCE): 17.17%
- Debt/Equity Ratio: 0.04
- Profit Margin: 4.75%
Application Details
- Retail Investors: Minimum application for 6,000 shares, totaling ₹120,000.
- High Networth Individuals (HNIs): Minimum bid for 12,000 shares, requiring an investment of ₹240,000.
Lot Size Breakdown:
| Application Type | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 6,000 | ₹120,000 |
| HNI (Min) | 2 | 12,000 | ₹240,000 |
Objectives of the IPO
The funds raised from the IPO will be allocated towards:
- Expansion of the retail network by launching 16 new QSR outlets.
- Security deposits and advance rent for new locations.
- Brokerage charges.
- Working capital requirements.
- General corporate expenses.
Should You Apply for the NeoPolitan Pizza and Foods IPO?
Investment Verdict: [May Apply]
According to IPO expert Dilip Davda, NeoPolitan Pizza and Foods operates in the competitive QSR and agricultural trading sectors. The company has shown consistent growth in revenue and profit, though it is in a highly fragmented market. While the IPO appears fully priced based on FY24 earnings, it offers moderate long-term investment potential for informed investors looking to enter the growing food sector.
NeoPolitan Pizza and Foods IPO Registrar
- Registrar: Bigshare Services Pvt Ltd
- Phone: +91-22-6263 8200
- Email: ipo@bigshareonline.com
- Website: Bigshare IPO Status
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