Goyal Salt LTD IPO - Review, Valuation, Date & Todays GMP

Goyal Salt Limited - Complete Overview

Established in 2010, Goyal Salt Limited primarily focuses on refining raw salts extracted from subsoil brine in the state of Rajasthan. These refined salts serve various purposes, including industrial and edible applications.

The company specializes in refining and delivering a range of high-quality products, including triple-refined free-flow iodized salt, industrial salt, double-fortified salt, and triple-refined half-dry salt.

Goyal Salt operates a well-equipped refinery located in Nawa City, situated adjacent to the renowned Sambhar Lake. The facility covers a total land area of 1.45 hectares and is dedicated to the salt refining process, raw salt storage from subsoil brine, and packaging of the refined salts.

Furthermore, the company holds lease rights to harvest raw salt on approximately 18.66 hectares of land, granted by the Government of Rajasthan in the vicinity of Nawa City's salt-producing region.

Goyal Salt primarily sources its raw materials from open market purchases, constituting approximately 75% of its total raw salt requirements. The remaining 23% and 2% are sourced from entities controlled by its promoters and salt land harvesting, respectively.

The company packages its refined salt in half-kilogram and one-kilogram sizes for household consumption, as well as in fifty-kilogram bags and jumbo bags for industrial applications. 

The demand for industrial salt remains high, given its diverse uses in industries such as soap and detergent manufacturing, textiles, dyeing, glass production, polyester, plastics, rubber, leather, and the chemical industry.
In the fiscal year 2022-23, Goyal Salt Limited achieved a revenue of Rs. 6,005.30 lakhs.

 

What does the company do? 

The core business activity of Goyal Salt Limited revolves around refining raw salts sourced from subsoil brine in the state of Rajasthan, making them suitable for both industrial and edible purposes.

 

 

Company Products

Triple-refined iodized free-flow salt, industrial-grade salt, double-fortified salt, and triple-refined semi-dry salt. 

 

IPO Overview

The Goyal Salt Limited IPO date is slated for September 26, 2023, to September 29, 2023. This SME IPO is anticipated to be listed on the NSE SME on October 10, 2023.

The Goyal Salt Limited IPO price is set between Rs. 36 to Rs. 38 per share, with the company aiming to raise Rs. 18.63 Crores in funds through this upcoming SME IPO.

For comprehensive IPO reviews and to stay updated with the upcoming IPO, please proceed to the Finowings IPO section.

 

Goyal Salt Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	26 September 2023
IPO Closing Date	29 September 2023
IPO Allotment Date	5 October 2023
Refund initiation	6 October 2023
IPO Listing Date	10 October 2023

 

Goyal Salt Limited IPO Details 

IPO Opening & Closing Date	26 September to 29 September 2023
Face value	Rs.10 per Share
Issue Price	Rs.36 to Rs.38 per Share
Lot Size	3000 Shares
Price of 1 lot	Rs.114,000
Issue Size	4,902,000 Shares (aggregating up to Rs.18.63 Cr)
Offer for sale	NA
Fresh issue	4,902,000 Shares (aggregating up to Rs.18.63 Cr)
Listing at	NSE SME
Issue Type	Book Built Issue IPO
Registrar	Bigshare Services Pvt Ltd

 

Goyal Salt Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Goyal Salt Limited IPO Reservation

Institutional Share Portion	50%
Non-institutional Share Portion	15%
Retail Share Portion	35%

 

Company Financial

Amount in Lakhs

Period	FY 21	FY 22	FY 23
Total Assets	2745.93	2733.41	3000.94
Total Revenue	6012.96	6615.00	11770.68
PAT	68.15	62.75	353.74
Net Worth	1121.57	1169.12	1618.11
Reserve & Surplus	921.99	969.54	534.92
Total Borrowings	1297.36	1059.80	920.11

 

Revenue of the Company in Last Three Years

(Amount in Lakhs)

Particularly	FY 23	FY 22	FY 21
Refined Free flow Iodized Salt	8,914.20	5,641.79	4,899.42
Refined Free Flow Industrial Salt	1,537.26	523.43	423.53
Double Fortified Salt	164.93	-	-
Refined Half Dry Salt	1,147.80	445.88	682.34
Total	11,764.19	6,611.09	6,005.30
Others	6.49	3.91	7.66
Total	11,770.68	6,615.00	6,012.96

 

Objective of the Issue

The company intends to use the Net Proceeds from the Fresh Issue for the following purposes:

• Enhancing quality through capital expenditure.
• Investing in brand creation and marketing expenses.
• Meeting the working capital requirements of the company.
• Covering general corporate expenses.

 

Promoters and Management of Goyal Salt Limited

Mr. Rajesh Goyal, Mr. Pramesh Goyal, Mr. Lokesh Goyal, Mrs. Radhika Goyal, Mrs. Priyanka Goyal, Mrs. Rekha Goyal, Kunj Bihari Goyal (HUF), Rajesh Goyal (HUF), Parmesh Goyal (HUF), and Lokesh Goyal (HUF) are the promoters of the company.

Pre-issue Promoter Shareholding	100.00%
Post-issue Promoter Shareholding

 

Peer Comparison 

Below are the listed peers of the Goyal Salt Limited

Company Name	Total Revenue for financial year 2023 (Rs. in Lakhs)	EPS  (Rs.)	P/E
Goyal Salt Limited	11,764.19	2.72	-
Saboo Sodium Chloro Limited	4,935.61	0.02	816.50

 

IPO's Valuations

To evaluate the IPO valuation, we can rely on the information provided by the company in its DRHP. Goyal Salt Limited IPO price is set within the range of Rs. 36 to Rs. 38 per share, and its EPS is Rs. 2.72. At the upper limit of the issue price, the company's P/E ratio stands at approximately 13.97.

 

Dividend Policy

The Company has not distributed any dividends to its Equity Shareholders in previous years, and any potential future dividend payments will depend on the company's financial performance.

 

IPO's Strengths 

• An adept management team and promoters, supported by a skilled workforce.
• A well-established refining facility and streamlined production process with cost-effective measures.
• Demonstrated strong and consistent financial performance, securing a prominent position in the market.
• A dedicated commitment to quality and safety standards.
• Long-standing and robust relationships with customers and dealers, along with efficient supply chain management.
• A harmonious relationship between management and labour.

 

IPO Weaknesses 

• The salt refining process of the company incurs process losses of 25.86%, 24.30%, and 20.48% for the years ending March 31, 2023, 2022, and 2021, respectively.
• The company derives a significant portion of its revenue, 68.47%, 60.35%, and 50.84%, from its top 10 customers for the fiscal years ending March 31, 2023, 2022, and 2021.
• The company faces challenges related to insufficient water availability at its refining unit.
• The Restated Financial Statements have been provided by Chartered Accountants who have undergone peer review but are not the Statutory Auditors of the Company.
• The company is involved in pending litigations, including actions against certain Directors.
• The company has received orders from the Madhya Pradesh State Civil Supply Corporation to supply refined iodized salt under the PDS. Failure to meet these requirements could negatively impact the company's reputation and result in penalties.
• The company is subject to rigorous quality requirements, frequent inspections, and audits, with product sales contingent on maintaining quality control and standards.
• Negative cash flow is observed from operating, investing, and financing activities.
• Non-compliance with safety, health, environmental laws, and other regulations may have adverse effects on the business.
• Intense competition is faced by the company from numerous larger players in the market.
• The company relies significantly on three primary products, which contribute substantially to its sales.
• The company is obligated to maintain various licenses, approvals, registrations, consents, and permits as part of its regular business operations.

 

 

IPO GMP Today

The Latest GMP of Goyal Salt SME IPO is Rs. 18.

 

Conclusion

Goyal Salt Limited holds a prominent market position and boasts a robust customer base. The company achieved a favourable profit in FY 2023. Nevertheless, it operates within an intensely competitive and fragmented industry. Experienced investors can invest in this issue after thoroughly assessing all aspects of this offering.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.