Bikaji Foods International is one of India’s largest fast-moving consumer goods (“FMCG”) brands with an international footprint. It is engaged in selling Indian snacks and sweets and is among the fastest-growing companies in the Indian organized snacks market.
Here are some key details about the IPO that retail investors should know about:
IPO Size: The company is looking to raise Rs 881.22 Crores, which will be an offer for sale.
IPO dates: The IPO will open for subscription on November 3rd, 2022, and close on November 7th, 2022. The shares will be credited to the investors on November 15th, 2022, and will be listed on the stock exchanges on November 16th, 2022.
Price band: The price band fixed by the company is Rs 285 to Rs 300 per share.
Lot size: A retail investor can apply for a minimum of 1 lot which is 50 shares (Rs 15,000) and a maximum of 13 lots which comes up to 650 shares (Rs 1,95,000).
Grey Market Information:
The shares of Bikaji Foods International traded at a premium of 14% in the grey market on November 3rd, 2022. The shares tarded at Rs 342. This gives it a premium of Rs 42 per share over the cap price of Rs 300.
Strengths of the Company
● The company has a well-established brand name along with a strong pan-India presence.
● The company has a diversified product portfolio that includes more than 250 products across all our product segments.
● The company has Strategically located, large scale sophisticated manufacturing facilities with stringent quality standards.
● The company has made an extensive distribution network in India over the years and has also established strategic arrangements with retail chains in domestic and international markets.
● The company is led by experienced promoters and a management team.
Weaknesses of the Company
● The revenue of the company is significantly dependent on the sale of its Bhujia products. Any changes can impact their business.
● The production of the company is heavily dependent on timely manufacturing. Any changes can disrupt the supply chain.
● The company is also dependent on its external distribution network. Any disputes with these parties can hinder their supply chain.
● The company requires raw materials for production. Any changes in the procurement or prices of raw materials can affect the business.
● The company is subject to stringent regulations under the Food Safety and Standards Act, 2006 (“FSS Act”).
Here’s what analysts have to say about IPO:
Geojit Financial Services (Rating: Subscribe)
Considering its consistent top-line growth, industry-leading position, future expansion plans, new product launches, investments in strengthening the brand recall, and good future prospects for the packaged food business, said Geojit.
Angel One (Rating: Subscribe)
The valuations are in line with peers including Prataap Snacks, Nestle India, and Britannia Industries. The company has a very strong pan India brand recall with ‘Bikaji’ and presence across the country, said Angel One.
Choice Broking (Rating: Subscribe with caution)
At the higher price band, Bikaji is demanding an EV/sales multiple of 4.5x, which is a premium to the peer average. The food market in which the company is operating is normally dominated by unorganized players, said Choice Broking.
Written by Anoushka Roy
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