Bikaji Foods International shares had a firm start on exchanges as the stock traded 7.6% above the IPO price, listing at Rs 321.15 on the BSE and at Rs 322.80 on the National Stock Exchange. The ethnic snacks company has fixed the IPO issue price at Rs 300, at the upper end of the price band of Rs 285-300. The Rs 811 crore IPO was subscribed 26.67 times from 3 to 7 November. The issue received bids for 55.04 crore shares, against 2.06 crore shares on offer. The qualified institutional buyers’ category was subscribed nearly 81 times, while non-institutional investors and the retail individual investors’ quota was subscribed seven times and 4.69 times.
“Bikaji Foods has debuted at Rs 322.80 i.e. 7% over its issue price. The company’s muted listing but the issue had received a good response from investors on both the institutional as well as Retail side. Nevertheless, the company’s margins are on the declining side and a P/E valuation of 95.2 looks expensive. Therefore, we advise only aggressive investors should consider making a long-term commitment to the company. Those who applied for listing gains can maintain a stop loss of Rs 310,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.
As the IPO is purely an offer-for-sale (OFS) by the promoters and existing shareholders, Bikaji Foods will not receive any proceeds from the issue. Ahead of the issue, the company had raised Rs 262 crore from anchor investors by allotting them 87.37 lakh equity shares at Rs 300 per share.
With a track record of three decades in the Indian snacks industry, Bikaji recorded a 22% compound annual growth rate (CAGR) in sales during FY20-FY22. Over the same period, its EBITDA (earnings before interest, tax, depreciation and amortisation) and profit after tax grew at a CAGR of 21% and 16%, respectively. However, in FY22, the company reported a 16% on-year decline in profit due to higher input cost and EBITDA margin dropped by 230 basis points (bps), but revenue grew 23% in the same period. With a fall in input costs, the second half of FY23 performance is expected to be better than the first half, analysts said.