Mrs Bectors IPO (Mrs Bectors Food Specialities IPO) – Date, Issue Price, GMP, Price Band, Review, Analysis and Details
Mrs Bectors IPO would open for subscription on 15th December, 2020. Mrs. Bectors Food is the leading manufacturing company of premium biscuits and bakery products. The issue size is is Rs 540.5 Crores. Should you invest in Mrs Bectors Food Specialities IPO? What are the risk factors an investor should keep in mind before applying for this IPO? Let me review and provide detailed analysis and news about this IPO in this article. You can decide whether it is good or bad with these pointers.
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About Mrs Bectors Food Specialities Limited
It is one of the leading companies in the premium and mid-premium biscuits segment and the premium bakery segment in North India. They manufacture and market a range of its biscuits such as cookies, creams, crackers, digestives and glucose under its flagship brand ‘Mrs. Bectors’s Cremica’.
They also manufacture and market, bakery products in savory and sweet categories which include breads, buns, pizza bases and cakes under its brand ‘English Oven’. They supply products to retail consumers in 26 states within India, as well as to reputed institutional customers with pan-India presence and to 64 countries across six continents during the Financial Year ended March 31, 2020. According to Technopak Report, ‘Mrs. Bectors’s Cremica’ is one of the leading biscuit brands in the premium and mid-premium segment in Punjab, Himachal Pradesh, Jammu and Kashmir and Ladakh and ‘English Oven’ is the one of the largest selling brand in the premium bakery segment in Delhi NCR, Mumbai and Bengaluru. They are the largest supplier of buns in India to reputed QSR chains such as Burger King India Limited, Connaught Plaza Restaurants Private Limited, Hardcastle Restaurants Private Limited, and Yum! Restaurants(India) Private Limited.
Mrs Bectors Food Specialities IPO Details
Here are the IPO issue details.
|Mrs Bectors Food Specialities IPO – Issue Details|
|IPO Date||Dec 15 to Dec 17, 2020|
|Face Value||Rs 10 per share|
|IPO Price band||Rs 288 to Rs 288 per share|
|Issue Size||Total of Rs 540.5 Crores
Fresh issue – Rs 40.5 Crores
OFS – Rs 500 Crores
|IPO Lot Size||50 shares|
|Lead Managers||SBI Capital, ICICI Securities, IIFL Securities|
|Listing at||BSE and NSE|
Objects of issue – Mrs Bectors Food Specialities IPO
Here are the objects of the IPO issue.
1) Offer for sale (OFS) for Rs 500 Crores: Money received under OFS would go to selling shareholders and company would not receive any proceeds.
2) Fresh issue of Rs 40.5 Crores: Proceeds would be used for the following.
i) Financing the project cost towards expansion of the Rajpura Manufacturing Facility by establishing a new production line for biscuits.
ii) General corporate purpose
Who are the company promoters?
Mr. Anoop Bectors is the promoter of this company.
Here is the summary of the financial information of the company.
|Total Revenues (Rs in Millions)||Profits after tax
(Rs in Millions)
|3 Months ending Jun-20||2,037.5||158.7||7.8%|
Its EPS for FY2020 is Rs 5.3 and last 3 years average EPS is Rs 5.62.
What are the key strengths of Mrs Bectors Food Specialities Limited?
Every investor should understand the company’s key strengths so that one can compare with its competitors to know how unique is such company in their business. Their investment decision would change based on these facts. Here are the key strengths of the company.
1) It is one of the leading brands in biscuits and bakery businesses in North India with an ability to establish brands
2) A leading exporter of biscuits
3) Established presence in retail and institutional bakery business
4) Modern and automated production processes with a focus on quality control
5) Widespread and established sales and distribution network
6) Experienced promoter and management team
What are the various strategies of Mrs Bectors Food Specialities Ltd?
Company strategies would help investors to know what company is intending to do in the future and whether these strategies would help in revenue or margin growth. Such information would help investors to decide whether to invest for short term, medium term or for the long term. Here are the company strategies.
1) Focusing on growth in premium biscuits and bakery segment to improve margin
2) Focus on product development in biscuits and bakery segments
3) Expand its product reach in India and globally
4) Expansion of its distribution network through diversification
5) Focus on increasing its brand awareness
Why to invest in this IPO?
Here are a few reasons to invest.
1) Mrs Bectors Food Specialties is the leading manufacturing company India for premium biscuits and bakery items.
2) Stable revenue growth and improved margins. However, its FY20 revenues fallen to Rs 764 Crores compared to FY2019 revenues of Rs 786 Crores.
3) Eligible company employees would get a discount of Rs 15 per share.
Risk Factors of investing in this IPO
These risk factors can impact company revenue and margins which would affect its share price. Investors should go through these points and understand them before investing.
1) The continuing effect of the COVID-19 pandemic on its business and operations is highly uncertain and cannot be predicted.
2) Its inability to anticipate, respond to and meet the tastes, preferences or consistent quality requirements of its consumers or its inability to accurately predict and successfully adapt to changes in market demand or consumer preference could reduce demand for its products, affect its brand loyalty and impact its sales.
3) They could be adversely affected due to restriction on the use of its brand name and any negative publicity of its products.
4) They have incurred indebtedness and may incur additional debt in the future, which may expose us to interest rate fluctuations, and restrict its operational flexibility in certain ways.
5) One of the group companies, CAFL, has incurred losses in the Financial Year 2018 and may incur losses in the future.
6) They currently avail benefits under certain export promotion schemes. Any failure in meeting the obligations under such schemes, may result in adversely affecting its business operations and financial condition.
7) In the past, one of the group companies, CAFL, has been in violation of the listing requirements of an erstwhile recognized stock exchange, OTC Exchange of India and CAFL, its Promoter and one of its Non-Executive Directors, have been subject to disciplinary actions by OTCEI in the past.
8) There have been instances of non-compliances with certain legislations, if they are unable to establish and maintain an effective system of internal controls and compliance, its business may get affected. They have also received an inquiry letter from RBI, any non-compliances in this regard may affect its business and reputation.
9) They have experienced negative cash flows (from investing activities and financing activities) in the past and may continue to have negative cash flows in the future. Any such negative cash flows in the future may adversely affect its business, financial condition and results of operations.
10) They have contingent liabilities disclosed and not provided for as on June 30, 2020 and profitability may be adversely affected if any of these contingent liabilities materialize.
11) For complete internal and external risk factors, you can refer the RHP of the company.
Mrs Bectors Food Specialities IPO Promoter Holding – Pre and Post IPO
Pre-issue share holding – 52.45%
Post issue share holding – 51%
Mrs Bectors Food Specialities IPO GMP / Grey Market Price
Mrs Bectors Food GMP / Grey Market Price is Rs 170 to Rs 180 as on 12th December, 2020.
Mrs Bectors Food Specialities IPO Dates / Timetable (Including Listing date)
|Mrs Bectors Food Specialities IPO Schedule|
|Finalization of Basis of Allotment||22-Dec-20|
|Unblocking of ABSA and Initiation of Refunds||23-Dec-20|
|Credit of shares to Demat Accounts||24-Dec-20|
|IPO Shares Listing Date||28-Dec-20|
How should I buy this IPO through Zerodha?
If you are Zerodha customer, you can apply this IPO online using UPI payment gateway. You can login to Zerodha Console and submit the IPO application form.
Here are quick steps to apply Mrs. Bectors Food IPO through Zerodha
- Login to Zerodha Console
- Visit portfolio and locate IPO link
- You would find Mrs. Bectors Food IPO row
- Click on the “Bid” button of the IPO
- Enter your UPI ID, Qty and Price for which you want to bid. Generally one would bid for higher price band.
- Click on ‘Submit’ IPO application button.
- Visit the UPI App (net banking or BHIM) to approve the payment mandate.
Mrs Bectors Food Specialities IPO price valuations
Here is how the valuations look like. This section would be updated once we hear the news on the issue price.
1) On the upper price band of Rs 288 and EPS of Rs 5.3 for FY20, the P/E ratio works out to be 54x.
2) For last 3 years EPS of Rs 5.62, the PE ratio is 51.4x.
3) If we consider 3 months ended Jun-20 EPS and analyze it FY21, the PE ratio is 26x.
4) Means, the company is asking the issue price of Rs 288 of the upper price band in the P/E range of 26x to 54x.
4) There are peers like Nestle India is trading at P/E 76x (Highest) and Prataap Snacks at P/E of 30x (Lowest) and industry average is 60x. Hence Mrs Bectors Food Price band of Rs 286 to Rs 288 at P/E of 26x to 54x is reasonably priced.
Mrs Bectors Food Specialities IPO – Should you invest?
This section is updated on 12-Dec-20 post confirmation on issue price band.
After reading all these positives and risk factors, you would get doubt “Should I buy this IPO”? or Is Mrs Bectors IPO good or bad? Let me provide you conclusion summary based on which you can decide.
Mrs Bectors Food Specialties is one of the leading manufacturing company India for premium biscuits and bakery items. Its revenues and margins are growing. Its margins have shown good improvement for Qtr ending Jun-2020. Its issue price is reasonably priced. High risk investors can invest for listing gains as well as for medium to long term perspective.
Mrs Bectors IPO Review by Stock Analysts and leading brokerage firms
Here are the Mrs. Bectors IPO recommendations by leading experts as on 15th December, 2020.
LKP Securities – Subscribe
Samco Securities – Subscribe only for listing gains
Angel Broking Firm – Subscribe for listing gains + Long term gains
Prabhudas Lilander – Subscribe
Geojit – Subscribe for long term gains
Taxguru.in – Long term investors can subscribe
Dilip Davda – Subsribe
Ajcon Global – Subscribe
SMC Global – Subscribe
A Digital Blogger – Subscribe
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