Bikaji Foods IPO Details, GMP and Review – Should you Avoid?
Bikaner based Bikaji Foods International is coming up with an IPO that would open for subscription on 3rd November, 2022. Bikaji Foods International Limited is one of the largest fast-moving consumer goods (FMCG) brands in India. Should you invest in Bikaji Foods IPO? This article would provide IPO details, Dates, GMP, Listing Date and conclusion on whether this is good or bad for investment.
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About Bikaji Foods International Limited
They are the third largest ethnic snack company in India with an international footprint, selling Indian snacks and sweets, and are the second fastest growing company in the Indian organized snacks market.
In Fiscal 2022, they were the largest manufacturer of Bikaneri bhujia with annual production of 29,380 tonnes, and they were the second largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes in Fiscal 2022. We are also the third largest player in the organised sweets market with annual capacity of 24,000 tonnes for packaged rasgulla, 23,040 tonnes for Soan papdi and 12,000 tonnes for Gulab jamun. They have given a novel twist to classic Indian snacks with a contemporary taste along with maintaining the regional flavors to address the evolving consumer preferences in India and internationally.
Bikaji Foods IPO Details
|IPO Opening Date||03-Nov-22|
|IPO Closing Date||07-Nov-22|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs 1 per equity share|
|IPO Price band||Rs 285 to Rs 300 per equity share|
|Lot Size||50 Shares|
|Min Order Quantity||50 Shares|
|Listing at||BSE and NSE|
|Total Issue Size||Rs. 881.22 Crores|
|Employee Discount||Rs.15 Per Share|
What are the strengths of Bikaji Foods International Limited?
1) The company has a well-established brand with pan-India recognition
2) It has a diversified product portfolio focused on various consumer segments and markets
3) The company is strategically located, large scale sophisticated manufacturing facilities with stringent quality standards
4) Extensive pan-India and global distribution network, arrangements with reputed retail chains and growing commerce and export channel
5) Company with consistent financial performance
6) It has experienced promoters and management team
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What are the Objects of the IPO Offer?
Bikaji Foods IPO Size is Rs 881.22 Crores which is only OFS. Under OFS, selling shareholders would sell their shares and the company would not get any money from this IPO proceeds.
Who are the promoters of Bikaji Foods International Limited?
Shiv Ratan Agarwal, Deepak Agarwal, Shiv Ratan Agarwal (HUF) and Deepak Agarwal (HUF) are the promoters of the company.
How is the company financial track record?
Here are the total assets, revenues and profits of the company in the last 3 years and 3 months.
|Financial Year ending / Period ending (Amt in Crores)|
|Profit After Tax||56.4||90.3||76.0||15.7|
Why to invest in Bikaji Foods IPO?
Here are the positive factors in this company.
1) Bikaji Foods International Ltd is one of the leading FMCG brand in India.
2) The company has well diversified with presence across Pan India focused on various consumer segments and markets.
3) The company has strong revenue growth in the last 3 years.
Risk Factors of investing in Bikaji Foods IPO
1) Its margins have declined in the last 2 years and 3 months. While it generated 6.8% margins on revenues in FY21, these have declined to 4.6% in FY22 and 3.7% for Q1 FY23.
2) Company IPO proceeds would go to selling shareholders and company would not get benefit from this IPO.
3) The company significantly depends on the sale of bhujia products. It’s also dependent on the sale of family pack stock keeping units for its revenues. The company’s inability to anticipate and adapt to evolving consumer tastes, preference and demands for particular products can affect business.
4) The company has proposed capacity expansion plans relating to its manufacturing facility subject to unanticipated delays in implementation and cost overruns.
5) The company has made investments in debt instruments that are not secured.
6) Investors should read complete risk factors indicated in the RHP of the IPO document before investing in this IPO.
Frequently Asked Questions (FAQs)
Who is the owner of Bikaji Foods?
In the late 80’s, Shri Shivratan Agarwal decided to create a new identity for himself, which led to the birth of the brand Bikaji.
Which is bigger Haldiram or Bikaji?
As per analysis from FortuneIndia, while Bikaji foods have around Rs 1,600 Crores business which constitutes 5% of total Indian snacks industry, Haldiram business is over Rs 7,000 Crores which is 31% share of the total snacks market. Hence, Haldiram is bigger than Bikaji Foods.
How much portion allocated to each group of investors in this IPO?
1) QIB - Not less than 50% of the offered shares 2) NII / HNI - Not less than 15% of the offered shares 3) Retail - Not less than 35% of the offered shares
Is it good or bad for investment?
An investor should always invest in a company that has strong financial track record. This company has generated strong revenue growth in the last 3 years and 3 months. Its margins have declined in the last 2 years and 3 months.
What is Bikaji Foods IPO GMP today?
GMP is nothing but the premium at which the shares are trading in offline market. This is just an indication about the IPO price as it is unorganized market. Bikaji Foods IPO GMP today as per market observers is between Rs 40 to Rs 80. Bikaji Foods International GMP as per IPOCentral – Rs 40 Bikaji Foods IPO GMP IPOWatch – Rs 70 Bikaji Foods IPO GMP Chanakya – Nil Bikaji Foods IPO GMP IPO Bazar – Rs 80
IPO of Bikaji Foods International Valuation
Bikaji Foods IPO price band is Rs 285 to 300 per share.
If we consider FY2022 EPS, the P/E ratio works out to be 95x.
If we consider last 3 years weighted EPS, the P/E ratio works out to be 94x.
If we consider Q1 FY23 EPS and annualize it, the P/E ratio works out to be 115x.
Means company is asking for the issue price in P/E of 94x to 115x. If we exclude Pratap Snacks which is trading at abnormal P/E, the other peers like Britannia Industries or Nestle India are trading at P/E of 60x to 86x. Hence Bikaji Foods IPO share price at P/E of 94x to 115x is overpriced.
IPO Guru Arun talks about Bikaji IPO Chittorgarh and indicates that it is “Too high price to book value” and says this IPO as “Avoid”.
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Bikaji Foods International dates – subscription, Allotment and Listing
|Finalization of Allotment||11-Nov-22|
|Initiation of Refunds||14-Nov-22|
|Credit to Demat Account||15-Nov-22|
|IPO Shares Listing Date||16-Nov-22|
How to buy Bikaji Foods IPO online through Zerodha?
If you do not have Zerodha account, sign-up here and proceed to the next step.
If you have a demat account with Zerodha, you can apply this IPO online using the UPI as a payment gateway. Zerodha customers can apply in this IPO by login into Zerodha Console submitting an IPO application form.
Follow below steps to apply this IPO in Zerodha platform:
1) Visit the Zerodha portal and login to the console.
2) Go to Portfolio and click the IPOs link.
3) Visit ‘Bikaji Foods International Limited IPO’ row and click the ‘Bid’ button.
4) Enter your UPI ID, Qty and the Price which you want to bid.
5) Click on ‘Submit’ IPO application form.
6) Visit the UPI App (net banking or BHIM) to approve the mandate.
Bikaji Foods IPO Review – Should you invest or avoid?
After going through all these points, you might be wondering whether Bikaji Foods IPO is good or bad for investment?
The company is one of the largest FMCG brand in India with pan India presence and with diversified portfolios. It generated strong revenue growth in the last 3 years and 3 months.
On the other hand, its margins are on declining mode. Its issue price is also overpriced.
Investors can wait and watch for a few more quarters. If margins improved and if the share price is available at discounted price post listing, they can take the decision during that time.
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Bikaji Food IPO is at an absurdly high valuation with 100% portion of OFS only (means company would not get any penny out of the IPO proceeds) is a completely no.