Zappfresh (DSM Foods) IPO Sees Lukewarm Response on Day 1, Subscribed Only 21%
The BSE SME IPO of meat delivery platform Zappfresh, operated by DSM Fresh Foods Ltd, witnessed a tepid response on the first day of bidding. According to data from Chittorgarh, the IPO was subscribed only 21% by the end of Day 1, receiving bids for 8.26 lakh shares against the total offer size of 39.08 lakh shares.
Institutional Interest Leads Early Bidding Activity
Among the three investor categories—Qualified Institutional Buyers (QIBs), Non-Institutional Investors (NIIs), and Retail Individual Investors (RIIs)—it was the QIBs that showed the most interest in Zappfresh’s IPO. The QIB portion received bids for 4.94 lakh shares out of the 11.16 lakh shares reserved, translating to a 44% subscription rate.
This indicates some level of institutional confidence in Zappfresh’s business model and future growth prospects. However, the overall participation still fell short of strong demand typically seen in successful SME IPOs.
NIIs and Retail Investors Hold Back
The non-institutional investor (NII) segment, which includes high-net-worth individuals and corporates, showed moderate interest. This category received bids for 1.77 lakh shares, representing a 21% subscription against the 8.38 lakh shares reserved for them.
The most lukewarm response came from retail investors, who bid for just 1.56 lakh shares compared to the 19.53 lakh shares allotted for them. This translates to a meagre 8% subscription rate, highlighting limited retail appetite for the issue on opening day.
The muted interest from retail participants could be attributed to several factors, including volatile market conditions, investor skepticism about the meat delivery segment, or valuation concerns.
Zappfresh IPO Details
Zappfresh is a direct-to-consumer (D2C) meat and seafood delivery company offering fresh, hygienic, and traceable products across several Indian cities. The company has built a tech-enabled supply chain and claims to deliver high-quality meat products within a short span of processing and packaging.
The IPO is part of the company’s plan to raise funds for expansion, brand visibility, working capital needs, and possibly to repay some debt. However, despite the growing market for fresh and packaged meat in India, the company has yet to see strong traction from investors.
Will the Zappfresh IPO Pick Up in the Coming Days?
While Day 1 subscription numbers appear underwhelming, SME IPOs often see a surge in the last two days of the bidding window. Market participants will be closely watching whether institutional interest translates into broader retail participation going forward.
Investors should keep an eye on Zappfresh’s fundamentals, peer comparison, financial performance, and growth potential before making any decisions.
Conclusion
The Zappfresh (DSM Foods) SME IPO opened to a subdued start, with only 21% of the issue subscribed on the first day. The lack of retail investor enthusiasm and moderate institutional interest may pose challenges for full subscription unless momentum picks up in the remaining days. As always, potential investors are advised to do due diligence before participating in any IPO.
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