The allotment status of Mrs Bectors Food’s Rs 540 crore initial public offer (IPO) is likely to be announced on Tuesday. The issue, which ran between December 15 to December 17, was the most successful IPO of 2020 so far, having received 198 times subscription as investors eye solid listing gains following the success of previous IPOs.
The IPO generated bids worth more than Rs 40,000 crore. The high net worth individual (HNI) portion was subscribed 620 times, the qualified institutional buyer (QIB) portion 177 times and the retail category witnessed nearly 30 times subscription. The shares of the company are expected to list on December 28.
The allotment status of Mrs Bectors IPO can be checked on the Link Intime or BSE website.
An applicant can check the status of their allotment on the website of Link Inktime India (link here) who is the registrar to the issue using just their PAN details and selecting the “Company Name” in the dropdown menu and clicking on search.
Whereas, an applicant trying to check the allotment status on the BSE (link here) website, can select the issue type as “Equity”, select the “Issue Name”, type in his or her “Application Number”, followed by “Permanent Account Number (PAN No.)” and clicking on “Search” button.
Priced at Rs 286-288 per share, the IPO comprised fresh issuance of shares worth Rs 40.54 crore and offer for sale (OFS) of Rs 500 crore by existing shareholders. ICICI Securities, IIFL Holdings and SBI Capital Markets were book-running lead managers to the issue.
The company is one of the leading companies in the premium and mid-premium biscuits segment and the premium bakery segment in North India. Analysts expect the biscuit and bakery market to grow by 9 per cent in the next few years due to urbanisation and increase in disposable income. Meanwhile, the institutional Indian bakery industry is expected to grow by 20 per cent due to increasing market share of QSR chains. READ MORE
Most of the brokers had given a ‘subscribe’ rating to the issue as they see comfort in valuations and growth prospects for the industry.
Mrs Bectors peers such as Britannia Industries, Nestle India, Prataap Snacks and DFM Foods are trading at trailing PE of 50.2, 85.6, 57.1 and 97.6 respectively. On the other hand, the company is priced at trailing PE of 27.9, Angel Broking said in a note.
“Given the significant discount compared to listed peers, there is comfort on the valuation. We are positive on the long-term growth prospects of the industry and the company, and hence recommend to “Subscribe” to the issue for long term as well as for listing gains,” it added.
Geojit Financial Services, too, sees long-term growth prospects for the company.
“At the upper price band of Rs 288, Mrs Bectors is available at a P/E of 22x on FY21E EPS (annualized), which looks attractive, given its higher profitability compared to similar sized peers. Considering its future growth prospects in packaged biscuits and QSR segment, we recommend a “Subscribe” rating with a long-term perspective,” it said in a IPO note.
However, Prabhudas Lilladher believes the strong margin expansion posted by the company in the first half seem unsustainable, although the bounce back in institutional business will provide reasonable profit growth in FY22.
“We believe that Mrs Bectors is well placed to grow in the bread and buns business but needs to scale up in the biscuits business, given smaller size than Britannia, Parle and Sunfeast. The stock is being offered at around 28xFY21 in comparison to 48xFY21 EPS for Britannia which provides a long term re-rating opportunity if it scales up the Biscuits business,” it said in a report.
At the top end, the company will have a market capitalization of nearly Rs 1,700 crore on a post-diluted basis. Mrs Bector will use the issue proceeds for setting up of a new production line for biscuits.
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