Neopolitan Pizza has garnered attention as it embarks on its Initial Public Offering (IPO) with a Fixed Price Issue amounting to ₹12.00 crores, which consists entirely of a Fresh Issue of 60.00 lakh shares. The subscription period for this IPO opens on September 30, 2024, and will close on October 04, 2024. The allotment is expected to be finalized on or about Monday, October 07, 2024, with shares set to be listed on the BSE SME on or around October 09, 2024.

The share price for the Neopolitan Pizza IPO is fixed at ₹20 per equity share, with a minimum lot size of 6,000 shares. This means that retail investors need to invest a minimum of ₹1,20,000, while High-Net-Worth Individuals (HNIs) are required to invest at least ₹2,40,000 for a minimum of 12,000 shares. The book-running lead manager for this IPO is Turnaround Corporate Advisors Private Limited, while BIGSHARE SERVICES PRIVATE LIMITED serves as the registrar for the issue. Additionally, MNM Stock Broking Private Limited acts as the sole market maker.

Neopolitan Pizza IPO Subscription Status

As of 10:00 AM on October 04, 2024, the Neopolitan Pizza IPO has seen substantial interest, being subscribed 9.06 times on its final day of the subscription period. This strong demand indicates a positive market response and potential investor confidence in the company's growth trajectory.

Grey Market Premium Insights

Currently, the Grey Market Premium (GMP) for Neopolitan Pizza is noted to be ₹0. This lack of premium suggests that no significant trading is occurring based on the GMP, which often reflects demand and supply dynamics in the unregulated market. Investors should note that the GMP should be interpreted with caution as it is primarily for educational and informational purposes.

Allotment Process

The allotment date for the Neopolitan Pizza IPO is set for October 07, 2024. Investors can check their allotment status online by navigating to the IPO allotment status page, selecting Neopolitan Pizza from the dropdown list, and entering their application number, PAN, or DP Client ID.

Utilization of IPO Proceeds

The proceeds from this IPO will be allocated towards various objectives, including:

₹708.00 Lakhs for the expansion of their retail network by launching 16 new Quick Service Restaurants (QSR).

₹26.00 Lakhs for security deposits and advance rent.

₹13.00 Lakhs for brokerage charges.

₹352.00 Lakhs for working capital requirements.

₹71.00 Lakhs for general corporate purposes.

Financial Performance Review

Neopolitan Pizza's business model not only focuses on pizza delivery but also engages in trading agricultural commodities like wheat, rice, tomatoes, and onions. The company's financials indicate a steady growth trend, with revenues for fiscal years 2024, 2023, and 2022 recorded at ₹4401.07 Lakhs, ₹2004.61 Lakhs, and ₹1630.82 Lakhs, respectively. Additionally, the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) figures for the same years were ₹323.82 Lakhs, ₹225.93 Lakhs, and ₹92.76 Lakhs. The Profit after Tax (PAT) increased significantly to ₹210.72 Lakhs in fiscal 2024 from ₹18.44 Lakhs in fiscal 2022, indicating a positive trajectory in profitability.

In terms of valuation, Neopolitan Pizza’s IPO presents a pre-issue EPS of ₹1.92 and a post-issue EPS of ₹1.23. The pre-issue P/E ratio stands at 10.41x, while the post-issue P/E ratio is 16.26x, compared to the industry P/E ratio of 48.97x. With a Return on Capital Employed (ROCE) of 17.06% and a Return on Equity (ROE) of 14.08% for FY24, the company appears to be fairly priced relative to its industry peers.

Investment Recommendation

Despite Neopolitan Pizza’s promising financial growth and the notable interest in its IPO, the Grey Market Premium indicates a potential lack of expected listing gains, currently showing 0%. Given this context and the company's financial metrics, our recommendation is for investors to avoid the Neopolitan Pizza and Foods Limited IPO for both listing gains and long-term investment purposes.

Investors should carefully consider their risk appetite and investment goals before proceeding with any investment related to this IPO.

For more insights into the evolving financial landscape and updates on economic developments, explore our articles on Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News - Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.