Mrs Bectors Food IPO Review

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Mrs Bectors Food Background

The company is engaged in the manufacturing of non-glucose biscuits and premium bread in North India. They operate under two of their well-known brands, “ Mrs. Bector’s Cremica” and “English Oven.”

Their range of products like biscuits, bread, and buns cater to retail customers in 11 states within India and institutional customers across the entire India.

They also export their biscuits under their label and third-party private labels to around 61 countries.

In the Delhi NCR area, their brand “English Oven” is one of the largest players in the premium bread segment supplying over 0.12 million loaves per day.

As per the Technopak Report, Mrs. Bectors Food is the largest supplier of buns in India, which also cater to famous QSR chains such as Hardcastle Restaurants Private and Burger King India Private Limited.

They have 6 strategically located manufacturing facilities in Phillaur and Rajpura (Punjab), Tahliwal (Himachal Pradesh), Greater Noida (Uttar Pradesh), Khapoli (Maharashtra), and Bengaluru (Karnataka), where all their products are manufactured in-house.

They constantly keep on introducing new products and maintain high levels of quality in their existing products.

As of June 30, 2018, their portfolio of products consists of 542 SKU’s products across all their product segments.

They have started supplying frozen pizzas, croissants, and muffins to hotels, restaurants, and cafés and introduced ‘Golden bytes’, ‘Kalonji Cracker’, a range of digestive biscuits including ’oatmeal’ and ‘cornflakes’, ‘100%’ whole wheat bread and “Bunfills” in the financial year 2018.

They have obtained quality certifications and accreditations like certification from the Food Safety and Standards Authority of India (FSSAI) and the FSSC 22000.

Also, the U.S. Food and Drugs Administration has provided the certification to their biscuit manufacturing facility situated in Phillaur (Punjab).

They have received British Retail Consortium to certify global standards for food safety for manufacturing of sweet and semi-sweet cookies, crackers, and biscuits and Halal certification for manufacturing biscuits.

Their distribution network consists of 135 super- stockists and 570 distributors. They export to 61 countries through their global distribution network and tie-ups with buying houses like Monteagle International (UK) Limited.

Mrs Bectors Food Managment Review

Currently, the Board of Mrs. Bectors Food consists of 8 Directors. Mr. Subhash Agarwal is the Chairman and Independent Director, Mr. Anoop Bector is the Managing Director, Mr. Ishaan Bector and Mr. Parveen Kumar Goel are Whole Time Directors.

Ms. Rajni Bector is the Non – Executive Director, Mr. Rahul Goswamy is the Non – Executive Nominee Director, Mr. Nem Chand Jain and Mr. Rajiv Dewan are the Independent Directors of Mrs. Bectors Food Limited.

Subhash Agarwal, Chairman, and Independent Director

He is a Commerce Graduate from Shri Ram College of Commerce, Delhi University, and holds a bachelor’s degree in law from Punjab University, Chandigarh. He is an advocate and has been practicing for around 60 years.

Since 1995, he has been a member of the District Taxation Bar Association, Ludhiana. He is an awardee of the Life Time Achievement Award and an Award of Appreciation by the District Taxation Bar Association (Direct Taxes), Ludhiana.

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Mrs Bectors Food IPO Data Points

Mrs. Bectors Food IPO will open on 15th December and close for subscription on 17th December.

The offer consists of an offer for sale of up to Rs.500 crores, 

Up to 50 lakhs equity shares aggregating up to ₹338 million are being offered by Mr. Anoop Bector,

• Linus Private Limited will sell equity shares of ₹245 crore.
• Marble Private limited will sell equity shares of ₹38.5 crore.
• GW Crown PTE. Ltd. will sell equity shares of ₹186 crore. 
• GW Confectionery PTE. Ltd.will sell equity shares of ₹30.5 crore.

₹50 lakhs of equity shares will be reserved for eligible employees, and Rs.15 per share as a discount will be issued to employees.

The price band range has been set at ₹286–₹288 per share. The IPO size is expected to be up to ₹8000 million or ₹800 Crore implying this to be one of the biggest IPOs of the year.

Also Read: Upcoming IPOs in 2021

The market lot size is of (undisclosed) equity shares, and the shares will be listed on the Bombay Stock Exchange (BSE).

 

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Mrs Bectors Food Financial Performance

The company has shown a consistent increase in total revenues and total assets over the last 3 years.

Revenues showed an increase of 8.73% in the fiscal year 2018 as compared to fiscal 2017. The PAT increased by 29.56% to ₹320.18 million in the financial year ended March 1, 2018, compared to ₹250.56 million reported in the previous year. 

The Return on Net Worth of the company in the financial years ended March 31, 2016, 2017, and 2018 was 19.15%, 11.02%, and 12.54%, respectively.

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Mrs Bectors Food IPO Objectives

The company will not receive the proceeds of the IPO. The main objectives of the Mrs. Bectors Food IPO are to provide liquidity to its shareholders, enhanced corporate image, brand name, and increased visibility

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Mrs Bectors Food IPO Dates

Mrs. Bectors Food filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on November, 2020 for the 100% Book Building IPO.

The offer will open on 15th December, 2020 and close on 17th December, 2020. The finalization of the basis of allotment is expected to happen by December 22, 2020, and the initiation of refunds is expected to start by December 23, 2020.

The transfer of shares to demat accounts is expected to start on 24th December, and the expected listing date will be 17th december.

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Mrs Bectors Food IPO Recommendation

Let us examine various strengths and risks related to the business of Mrs. Bectors Food Limited.

The biggest strength of the business is its well-known brands and a portfolio of a myriad of medium and premium products.

Their focus on quality and recipes of their products make them enjoy a comfortable market share in their industry.

They keep on innovating and launching new products in the market while maintaining their previous products’ quality.

They are also a leading exporter of biscuits with about 23% share of the Indian biscuit export market according to the Technopak Report in 2017.

Their revenues from the export of biscuits were ₹2,063.41 million, constituting 45.52% of the Biscuit Revenue from Direct Sales in Financial Year 2018, which has grown at a CAGR 13.21% during the period between the financial years 2014 to 2018.

Their exports mainly help them in operating across business cycles and mitigate seasonality risk in the domestic market.

They are also the preferred supplier of buns to Hardcastle Restaurants Private for the last 11 years.

Their stringent quality standards have helped them to cater to other multinational QSR chains as well.

They have six manufacturing facilities that have been located strategically and have developed a strong network of distributors across India and globally.

The experience and skills of the promoters and management team are also an added strength for the business. Also, they have a strong financial profile and track record.

Now, listing down some important risk factors for the business of the company.

The demand for their products depends on demographics, local preferences, food consumption trends, and consumer confidence. Any shift in these and their inability to anticipate these may affect the business negatively.

Any negative publicity due to any contamination or deterioration of their products may cause legal problems, and restriction on the use of their well-recognized brand name may affect the company’s profitability.

Also, the company faces fierce competition from many of its peers like Britannia, Parle, and ITC in the biscuit segment and Britannia, Modern, and Harvest Gold in the bread and bakery segment.

Failure to protect confidential information from their competitors like product recipes, pricing, or launch information may negatively affect the operations.

Insufficient supply of raw materials due to any reason like seasonality, price fluctuation, and adulteration may affect the company’s operations.

Inability to adhere to strict food safety laws, environmental laws, and other mandatory regulations of their industry or the loss of their existing certifications for their products also pose risks to the business.

After analyzing the company’s market position, its growth and expansion strategies, and its financial performance and risks related to the business, it can be said that the investors may subscribe to the Mrs. Bectors Food IPO.

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In case you are looking to invest in this IPO or stock market investments in general, let us get you moving towards the right path:

 

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Mrs Bectors Food IPO Advisors Information

Edelweiss Financial Services Limited, IDFC Bank and IIFL Holdings are acting as Book Running Lead Manager to the issue. Link Intime India Private is acting as the Registrar for the Mrs Bectors Food IPO.