Bikaji Foods International Ltd IPO GMP: The initial public offering (IPO) of snacks and sweets maker Bikaji Foods International opened for subscription on Thursday, November 3, 2022. It opened for public subscription at 10 am and was subscribed around 21 per cent by 12:06 pm on the first day of bidding.
It received total bids for 44,26,750 shares across both the stock exchanges against 2,06,36,790 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 881 crore Bikaji Foods IPO will be available for subscription till Monday, November 7, 2022, and the price band has been fixed at Rs 285-300 per share.
The IPO is purely an offer-for-sale (OFS) of 29,373,984 equity shares by its promoters and existing shareholders. The company will not receive any proceeds from the issue.
Among the selling shareholders are both the promoters – Shiv Ratan Agarwal and Deepak Agarwal, who are looking to sell up to 25 lakh company shares each. Apart from the promoters, existing investor selling shareholders are – India 2020 Maharaja Ltd, Intensive Softshare Pvt Ltd, IIFL Special Opportunities Funds and Avendus Future Leaders Fund I.
Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.
Bikaji Foods International is the third largest ethnic snacks company in India with an international footprint, selling Indian snacks and sweets, and are the second fastest growing company in the Indian organised snacks market. The company claimed they were largest manufacturer of Bikaneri bhujia with annual production of 29,380 tonnes in Fiscal 2022 (FY22) and during the same period they were also the second largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes.
Apart from snacks, the company is also a leading maker of packaged rasgulla, soan papdi and gulab jamun.
“We are also the third largest player in the organised sweets market with annual capacity of 24,000 tonnes for packaged rasgulla, 23,040 tonnes for soan papdi and 12,000 tonnes for gulab jamun,” the company said in its red herring prospectus (RHP).
Their entire product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs (assortment), frozen food, mathri range and cookies. By the end of June 2022 quarter, Bikaji Foods International sold more than 300 products under the Bikaji brand.
Investors who wish to subscribe to Bikaji Foods IPO can bid in a lot of 50 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 15,000 to get a single lot of Bikaji Foods International. The shares will be listed on both BSE and NSE.
The applicants also must note that the cut-off time for UPI mandate acceptance is Monday, November 7, 2022, upto 5:00 pm, the last day of IPO bidding. Further bids with confirmed status of mandate amount blocked (RC100) shall be considered as valid applications and hence, investors are advised to submit their UPI applications in IPO well in advance to avoid any last minute technical/systemic constraints that may hamper their ability to participate in IPOs by successfully accepting the mandate.
Axis Capital, Intensive Fiscal Services Pvt Ltd, JM Financial, IIFL Securities and Kotak Mahindra Capital are the book-running lead managers to the offer while Link Intime India is the registrar of the issue.
Before heading into the IPO, Bikaji Foods International on Wednesday raised over Rs 262 crore (Rs 2,62,11,58,200) from 36 anchor investors in lieu of 87,37,194 equity shares at Rs 300 each, data from the stock exchanges showed.
Eastspring Investments, BNP Paribas, Morgan Stanley, Government of Singapore, Tata Mutual Fund (MF), ICICI Prudential MF, Kotak MF, HDFC MF and Edelweiss MF are among the anchor investors.
The anchor investors include Government of Singapore, ICICI Prudential Mutual Fund, HDFC MF, Aditya Birla Sun Life MF, WhiteOak Capital, Nomura, BlackRock, Goldman Sachs, Morgan Stanley, ICICI Prudential Life Insurance Company, Max Life Insurance Company, Tata MF, Kotak MF and Edelweiss MF among others.
Commenting on the Bikaji IPO, Ravi Singh, vice president and head of research at Share India Securities said, “Bikaji Foods is a well known brand in ethnic snacks and namkeen market. It’s network distribution and top line has shown steady growth and further expansion are on cards. However, it has posted declined margins for FY22 on higher sales and this margin pressure has scaled back the bottom line growth. Considering, the company’s FY23 valuations, the IPO is highly priced. Bikaji has always performed well as compared to its peers in terms of revenue and PAT growth. We recommend to subscribe the IPO.”
The research teams at Geojit Financial Services, LKP Securities, Motilal Oswal Financial Services and Reliance Securities in their respective IPO notes have given a “Subscribe” rating to the offer.
Motilal Oswal Financial Services in its IPO note said “Bikaji with its industry leading position is well placed to capture the high growth snacks market. Upcoming new manufacturing facilities, expansion of distribution base and strengthening of product/geographic portfolio could propel earnings growth. Despite high competition, we expect Bikaji to do well given the strong positioning of its brand and products. However, it is valued at 98xFY22 P/E which seems expensive. Thus, we suggest investors to Subscribe for listing gains.”
Geojit Research in its report noted, “At the upper price band of ₹300, BFIL is available at a P/E of 98.5x (FY22), which appears expensive compared to its peers. 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, we assign a “Subscribe” rating on a short -term basis for high-risk investors.”