Bikaji Foods’ ₹881 crore IPO opens today

• The FMCG brand has a strong presence in North and Eastern Indian markets with a wide range of ethnic snacks and namkeens.
• The company will not receive any funds from the IPO as it is a complete offer for sale by promoters and shareholders.
• The price band of the IPO is set at ₹285-300 a share.
• In FY22, Bikaji Foods’ profit came down by 15.5% to ₹76 crore from ₹90 crore in FY21 due to raw material inflation.
• The grey market premium (GMP) of the company’s shares are at ₹75 per share.

FMCG company Bikaji Foods International, is all set to open its ₹881 crore initial public offering (IPO) on November 3 and close on November 7.

The price band of the IPO is set at ₹285-300 a share.

Bikaji Foods’ products fall broadly into six categories – bhujia, namkeen, packaged sweets, papad, western snacks as well as gift packs (assortments), frozen food, mathri range and cookies.

The FMCG brand has a strong presence in North and Eastern Indian markets with a wide range of ethnic snacks and namkeens. It is the market leader in the branded Bikaneri bhujia market. Lately, players such as Prataap Snacks, DFM foods, Pepsi and ITC have forayed into ethnic namkeen and snacks market.

The company will not receive any funds from the IPO as it is a complete offer for sale by promoters and shareholders.

The grey market premium (GMP) of the company’s shares are at ₹75 per share. GMP is the premium at which IPO shares are traded in an unofficial market before they are listed on the stock exchanges.

The promoters will be selling around 2% of their stake taking their post-IPO shareholding to 76%. Other shareholders who are selling include -- India 2020 Maharaja (12 million shares), IIFL Special Opportunities Fund (11 million shares), Avendus Future Leaders Fund I (1.2 million shares) and Intensive Softshare (0.1 million shares).

Some key competitors of the FMCG brand include Haldiram Foods International, Bikanerwala, Prataap Snacks, Balaji Wafers Private, ITC, Pepsico India Holdings and DFM Foods.

Bikaji Foods International is the third largest player in the Indian branded snack industry with 9% market share after Haldiram and Balaji.
The company has 25 legal proceedings against it and any adverse decision in such proceedings may have a material adverse effect on business, financial condition, cash flows and results of operations, states RHP.

In FY22, Bikaji Foods’ profit came down by 15.5% to ₹76 crore from ₹90 crore in FY21 due to raw material inflation. Meanwhile its revenue rose to ₹1,610 crore in FY22 from ₹1,310 crore from the previous year.

Its profits are also being impacted by a number of factors, including product pricing, raw materials, labour, packaging and fuel costs. Unplanned investment in infrastructure, marketing activities could impact its profit and operating margin, the company said.

Bikaji Foods has seven manufacturing facilities in Rajasthan, Assam, Karnataka and Bihar. yThe company exports products to 35 countries in North America, Europe, Middle East, Africa, and Asia Pacific.

The company’s established market is in Rajasthan, Assam and Bihar with market share of approximately 45%, 58% and 29% respectively in the branded ethnic snack category in such states. It has also gradually expanded its footprint across India, with operations across 23 states and four union territories.

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