Shares of Bikaji Foods International made a decent market debut today. The stock listed at ₹322.80 per share vs its issue price of ₹300 per share, a premium of over 7.6 percent on the NSE. Meanwhile, on BSE, it listed at a premium of 7 percent at ₹321. The ₹881-crore initial public offering of the firm opened for subscription on November 3 and closed on November 7. The company had fixed the IPO price band at ₹285-300 per share.
The stock hit a high of ₹334.70 on NSE in intra-day deals, up 11.5 percent from its issue price. It ended 5.8 percent higher than its issue price at ₹317.50 on the listing day.
The IPO received a strong investor response and was subscribed over 26.67 times between November 3-7.
The quota reserved for qualified institutional buyers (QIBs) was subscribed 80.6 times while those reserved for non-institutional investors (NIIs), retailers and employees were subscribed 7.1 times 4.77 times and 4.38 times, respectively.
The IPO only had an offer for sale (OFS) portion, thus the company will not receive any proceeds from the issue. The selling shareholders will be entitled to the entire proceeds, giving them a partial or full exit from the company.
The OFS was of up to 29,373,984 equity shares with a face value of Re 1 each by existing shareholders and promoter group entities.
Bikaji Foods is India's third-largest ethnic snack company. The company's product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, and western snacks among others. It is the second fastest-growing company with a CAGR of 21.3 percent from FY2019 to FY2022 in the Indian organized snacks market.
Its revenue from operations grew 23 percent to ₹1,610.96 crore in FY22 against ₹1,310.75 crore a year ago. For the three months ending June 30, revenue from operations stood at ₹419.16 crore, with a net profit of ₹15.7 crore.
The company has registered good revenue growth over the recent years (5-year CAGR of 19.8 percent over FY18– FY22) and a growth of 9.08 percent in EBITDA over the same period. The sales of food products had grown at a CAGR of 22.25 percent from ₹1,072.18 crore in FY20 to ₹1,602.29 crore in FY22.
Bikaji Foods International had mobilised ₹262.11 crore from 36 anchor investors ahead of its IPO as it allocated 87.37 lakh equity shares at ₹300 apiece.
Government of Singapore, Whiteoak Capital, Blackrock Global Funds, Goldman Sachs, Morgan Stanley, Eastspring Investments, Neuberger Berman Emerging Markets, Carmignac Portfolio, Bay Capital and Edelweiss were among the anchor investors.
The majority of the brokerages remain positive on the issue due to their industry-leading position, consistent financials and strong brand visibility, however, some brokerages have flagged pricey valuations and a complete OFS issue as areas of concern.
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, Geojit Financial Services has assigned a subscribe rating on the issue on a short-term basis for high-risk investors.
“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," it said.