Bikaji Foods International Limited is coming up with its Initial Public Offering. The IPO will open for subscription on November 3rd, 2022, and close on November 7th, 2022. It is looking to raise Rs 881.22 Crores, which will be an offer for sale.
In this article, we will look at the Bikaji Foods IPO Review and analyze its strengths and weaknesses. Keep reading to find out!
Bikaji Foods IPO Review – About The Company
Mr. Shiv Ratan Agarwal launched the Bikaji brand in the year 1993 with an in-depth understanding of Indian tastes and preferences.
Today the company 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.
The company stood as the second largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes in Fiscal 2021.
The company serves the sweet tooth by being one of the largest manufacturers of packaged rasgulla with an annual capacity of 24,000 tonnes and one of the largest manufacturers of soan papdi and gulab jamun with an annual capacity of 23,040 tonnes and 12,000 tonnes respectively.
The company has a large pan-India distribution network. As of September 30, 2021, they had five depots, 43 super stockists, and 438 direct and 1,644 indirect distributors that work with their super stockists, located across 22 states and three union territories in India.
The Product portfolio of the company
Their products range from bhujia, namkeen, packaged sweets, papad, and western snacks as well as other snacks which primarily include gift packs (assortment), frozen food, mathri range, and cookies.
(Source: DRHP of the company)
The competitors of the company
(Source: DRHP of the company)
Bikaji Foods IPO Review – Financial Highlights
(Source: DRHP of the company)
Bikaji Foods IPO Review – Industry Overview
India’s packaged food business is currently valued at ₹ 3,615 billion. It has grown significantly in the last five years on account of changing lifestyles, rising incomes, and urbanization. It is estimated to grow at a CAGR of 11.50% in the next five years to reach ₹ 5,581 billion.
Indian Savoury Snacks market is valued at ₹ 728 billion in 2021 and is expected to reach ₹ 1,186 billion by 2025 at a CAGR of 13%.
Sweets have been a very traditional and popular cultural aspect in Indian households. The Indian sweet market is valued at ₹ 589 Billion with a major share coming from unorganized players. The market is predicted to reach ₹ 843 billion by 2025.
The Papad market in India is expected to reach ₹ 99 billion by 2025 with a CAGR of 7.58%. The organized market in the papad segment is valued at ₹ 23 billion and is growing at a CAGR of 10%.
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”).
Bikaji Foods IPO Review – GMP
The shares of Bikaji Foods International traded at a premium of 23.67% in the grey market on November 2nd, 2022. The shares tarded at Rs 371. This gives it a premium of Rs 71 per share over the cap price of Rs 300.
Bikaji Foods IPO Review – Key IPO Information
Promoters: Shiv Ratan Agarwal, Deepak Agarwal, Shiv Ratan Agarwal (HUF), and Deepak Agarwal (HUF)
Book Running Lead Managers: JM Financial Limited, Axis Capital Limited, IIFL Securities Limited, Intensive Fiscal Services Private Limited, and Kotak Mahindra Capital Company Limited.
Registrar To The Offer: Link Intime India Private Limited
| Particulars | Details |
|---|---|
| IPO Size | ₹881.22 Crore |
| Fresh Issue | - |
| Offer for Sale (OFS) | ₹881.22 Crore |
| Opening date | November 3, 2022 |
| Closing date | November 7, 2022 |
| Face Value | ₹1 per share |
| Price Band | ₹285 to ₹300 per share |
| Lot Size | 50 Shares |
| Minimum Lot Size | 1 (50 Shares) |
| Maximum Lot Size | 13 (650 Shares) |
| Listing Date | November 16, 2022 |
The Objective of the Issue
The Net Proceeds from the Fresh Issue are proposed to be utilized for:
- Achieve the benefits of listing the Equity Shares on the Stock Exchanges;
- Carry out the Offer for Sale of up to 29,373,984 Equity Shares by the Selling Shareholders.
In Closing
In this article, we looked at the details of Bikaji Foods IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.
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