Mrs Bectors Food IPO: Should you subscribe?

Dates, Price band, Lot size, Risks, Review and broker recommendations etc.

Mrs Bectors Food IPO

Mrs Bectors Food IPO

Listing Update

Mrs Bectors Food lists at ₹500 a premium of 73.61% over the issue price of ₹288. As of 10:30 AM on the listing day, the stock was trading at ₹589, a premium of 104.3%. Mrs Bectors Food IPO received stellar response across all investor categories – QIB, NII and RII. The issue was subscribed 198 times making it the most subscribed IPO in 2020 so far. 

Mrs Bectors Food Specialities Limited raised a total of ₹540.54 crores from this issue, which consisted of a fresh issue of ₹40.54 crores and an offer for sale of Rs ₹500 crores by the promoter and selling shareholders

Other Updates

  • Issue subscribed 198.021 times
  • Raised ₹162.01 Cr via anchor investor sale of 56,25,415 shares
  • Grey Market Premium (GMP) today: ₹212 – ₹220

Final Subscription Status

Investor CategorySubscription
QIB176.850x
Non-Institutional620.856x
Retail29.325x
Employee45.459x
Total Subscription198.021x

Company Info

Mrs Bectors Food Specialities manufactures and markets a range of products such as biscuits, bread and buns. It markets a wide variety of biscuits and bread under the flagship brand ‘Mrs Bector’s Cremica’ and the ‘English Oven’ respectively. Its also the key supplier of buns for many QSR chains in India (Mc Donalds, Burger King etc.)

Competitive Strengths

  • Established brands with a diversified product portfolio of medium and premium products
  • Leading exporter of biscuits
  • Established presence in the retail and institutional bakery business
  • A leading supplier of buns to the fast-growing QSR industry (Burger King, Mc Donalds etc.)
  • Widespread and established sales and distribution network
  • Modern and automated production process with a focus on quality control
  • Experienced promoter and management team

Company Strategy

  1. Focusing on growth in premium biscuits and bakery segment to improve margin
  2. Focus on product development in biscuits and bakery segment
  3. Expand product reach in India and globally
  4. Expansion of the distribution network through diversification
  5. Focus on increasing brand awareness

Financial Performance:

Overall201820192020 (Mar)2020 (Jun)
Revenue from Ops6,939.65 Cr7,836.65 Cr7,621.22 Cr2,028.48 Cr
Profit before Tax528.41 Cr506.56 Cr391.80 Cr212.99 Cr
EPS (Basic)6.265.785.302.77
Biscuits201820192020 (Mar)2020 (Jun)
Gross Margin42.11%43.63%44.35%45.61%
EBIDTA10.29%10.38%8.80%15.77%
Bakery201820192020 (Mar)2020 (Jun)
Gross Margin50.77%50.78%50.12%54.87%
EBIDTA16.73%15.43%17.65%20.35%

Proceeds from the IPO will be used to:

  • Finance Expansion of the Rajpura Manufacturing Unit by establishing a new production line for biscuits
  • General corporate purposes

In addition, the company expects to achieve the benefits of listing its Equity Shares on the Stock Exchanges

Mrs Bectors Food IPO Dashboard

Issue Details

TypeValue
Issue Size₹540.54 Cr. (1,88,82,581 shares)
Fresh Issue₹40.54 Cr.
Offer For sale₹500 Cr.
Face Value₹10/- per Equity Share
IPO Price₹286 – ₹288
Lot Size50
LotsMin 1 – Max 13

Key Dates

Date TypeDate
Bid Open15/12
Bid Close17/12
Allotment Finalization22/12
Initiation of Refunds23/12
Credit of Shares24/12
Listing Date28/12

Lot Size and Price

LotsSharesAmount
150₹14,400
13650₹1,87,200

Promoter Holding

HoldingPercentage
Pre-Issue52.45%
Post – issue51.00%

Mrs Bectors Food IPO: Investor Quota and Shares Offered

Investor TypeQuotaShares on Offer
QIB50%37,76,502* shares
NII15%28,32,378 shares
RII (Retail)35%66,08,881 shares
Total100%1,32,36,211 shares
*Shares left for the subscription after anchor investor sale of ₹162.01 Cr.
Total Shares – 1,88,82,581

Mrs Bectors Food IPO: Day-Wise Subscription Status

DayDay 1Day 2Day 3
QIB0.011x4.674x176.850x
NII1.367x8.668x620.856x
RII (Retail)6.833x16.366x29.325x
Employee9.455x30.454x45.459x
Total3.725x11.405x198.021x

Analyst Recommendations – Should you subscribe?

Angel Broking: Subscribe

“We think Mrs Bectors Food Specialities should be able to grow in line with the industry managed by the promoters having more than 25 years of sector knowledge. Peers such as Britannia Industries, Nestle India, Prataap Snacks and DFM Foods are trading at trailing PE of 50.2 times, 85.6 times, 57.1 times and 97.6 times, respectively. Given the discount, there is comfort on the valuation. We recommend “Subscribe” to Mrs Bectors Food IPO for long term as well as for listing gains, said Keshav Lahoti of Angel Broking.

Prabhudas Lilladher: Subscribe

Prabhudas Lilladher recommends subscribing Mrs Bectors Food IPO. “The stock is being offered at 28 times FY21 EPS in comparison to 48 times FY21 EPS for Britannia which provides a long term re-rating opportunity if it scales up the Biscuits business,” said Prabhudas Lilladher.

LKP Securities: Subscribe

“At the higher price band of Rs 288, the stock is valued at 28 times its trailing 12-month earnings of Rs 10.32, which looks quite attractive considering the brand equity, distribution network, strong fundamentals and robust growth prospects”, said the brokerage while recommending Mrs Bectors Food IPO

Mrs Bectors Food IPO – Risks

  • Inability to anticipate, respond to and meet the tastes, preferences or inability to accurately predict and successfully adapt to changes in market demand could adversely impact the business.
  • The company could be adversely affected due to the restriction on the use of the brand name and any negative publicity of its products.
  • The company has incurred indebtedness and may incur additional debt in the future, which may restrict operational flexibility in certain ways.
  • One of the Group Companies, CAFL, has incurred losses in the Financial Year2018 and may incur losses in the future
  • In the past, CAFL, has been in violation of listing requirements of an erstwhile recognised stock exchange, OTC Exchange of India (“OTCEI”) and CAFL, the Promoter and one of the Non-Executive Directors, have been subject to disciplinary actions by OTCEI in the past.
  • The company experienced negative cash flows (from investing activities and financing activities) in the past and may continue to have negative cash flows in the future.
  • Concerns over nutritional values of the products may reduce demand for products.
  • Inability to expand business network and products to various regions of India may adversely affect the business, financial condition and results of operation.

For complete internal and external risk factors, you can refer the DRHP of the company.

Mrs Bectors Food IPO: Registrar and Lead Managers

Registrar of the Issue

Link Intime India Private Limited
C 101, 247 Park, L.B.S.Marg, Vikhroli (West), Mumbai, Maharashtra 400078
Phone: 022 49186270
Email: [email protected]

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