Mrs Bectors’ maiden offer will open on December 15, for three days subscription period until December 17. The Rs 540 crores offer will test investors’ zeal once more for the initial public offering segment, which has already subscribed over 150 times thrice for Mazagon Dock Ship Builders, Happiest Minds, and Burger King IPOs. Burger King IPO was the latest, which received a whopping 156 times subscription.
So, let’s consider the key factors of Mrs Bectors IPO, which will open tomorrow, that might make the offer attractive to investors.
About The Business
The company is a leading name in producing a wide range of premium bakery and mid-premium biscuits with a PAN India presence. Its products are sold in 26 Indian states and 64 countries worldwide. It is one of the leading suppliers in government canteens and registered in Indian Railway’s supplier’s list.
Mrs Bectors manufactures and markets biscuits, cream, digestive cookies, glucose under its flagship Mrs Bectors Creamier, and bakery items like bread, buns, pizza bases, and cakes as English Oven. It has a strong presence in metros, especially in north Indian cities, through 4422 preferred outlets.
It is also the leading supplier of buns to quick-serving restaurants chains like Burger King India, McDonald’s, KFC, Pizza Hut, and more.
The company produces 96 types of bakery items and 384 types of biscuits in its six strategically located manufacturing units.
Strong financial remains a key factor for a company to attract investors, and Mrs Bectors has registered steady growth in profit over the years. The company mentioned an increase in its EBITDA ratio in its last reported financial statement, whereas the EBITDA margin has remained unchanged at 12.5 percent over the past three years. Biscuit revenue grew at CAGR of 7.5 percent between FY2018-20. The company reported a profit after tax (PTA) of Rs 388.83 crores in its Q3 report.
Key points of Mrs Bectors IPO offers
- The IPO size of Rs 540 crores will open on December 15 and remain open till December 17, 2020
- It consists of both fresh shares worth Rs 40 crores and offers for sale shares from the promoters
- Shares worth Rs 50 crores are available to eligible employees at a discount of Rs 15 from the market price
- The shares containing the face value of Rs 10 will launch in the price band of Rs 286-288
- Investors will have to bid for a minimum lot size of 50 equities
- The company plans to utilise the funds towards the expansion of its Rajpura unit and meeting general corporate expenses
The risk factors analysis shows that the current pandemic condition may continue to affect the sector’s performance with rising concerns over food contamination and spread of disease. Negative reviews, inability to anticipate customer demand and manage future inventories, and concerns over the nutritional value of its products might also impact the company’s profitability in the future.
Moreover, The Rs 38,000 crore Indian biscuit and bakery consumer market are dominated by large players like Britania and Parle, which share sixty-five percent of the market among them. Mrs Bector occupies 1 percent of the segment.
Mrs Bectors is the fifteenth company to make a debut in the stock exchange this year. Overall, the IPO market has performed well from July onwards, and companies have raised more than Rs 30,000 crores from the market.
Apart from Mrs Bectors, few more companies will also launch their IPO shares before the financial year ends.
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