Bikaji Foods International Limited IPO opens for subscription on 3rd November and closes on 7th November. Let us look at the IPO details and the company. 

Bikaji Foods International Limited IPO Details

• Price band: Rs. 285 - Rs. 300
• Issue Size: Rs. 881.22 crore (Only Offer For Sale)
• Reservation: QIB 50%, Retail - 35%, NII 15%
• Minimum Investment: InvestoRs. need to make a minimum investment of Rs. 15,000
• Bid lot: InvestoRs. can bid for 50 shares and in multiples of 50 shares

What does Bikaji Foods International do? 

The company is one of the largest FMCG brands in India. They have a range of products that include 6 principal categories - bhujia, namkeen, papad, packaged sweets, western snacks, and other snacks. They are the largest manufacturer of Bikaneri bhujia and the second largest manufacturer of handmade papad (FY22). Bikaji Foods has exported its products to 21 international countries, including the Middle East, Africa, North America, Europe, and Asia Pacific.

What is the industry outlook in which Bikaji Foods operates?

The packaged food retail revenue has grown at a CAGR of 8.3% between FY15 and FY22. In the next five years, it is expected to grow at a CAGR of 8% and will be valued at Rs. 5,798 billion.

The organized western snacks segment is expected to grow at a 15% CAGR till 2026, while the overall papad market will grow at a CAGR of 7%. It is expected to reach Rs. 103 billion by 2026.

Who are the listed peers of Bikaji Foods International?

The company will compete with smaller players in the industry and also with FMCG giants. The smaller listed peers. include Prataap Snacks and DFM Foods, while the giants include names like Nestle India and Britannia Ltd.

Bikaji Foods International Limited: Financials

Below are the key financial numbers of Bikaji Foods:

• For FY20, FY21, and FY22, the company reported revenue of Rs. 1074.55 crore, Rs. 1310.75 crore, and Rs. 1610.96 crore, respectively. During this period, the revenue has grown at a CAGR of 22.45%.
• The net profit reported by the company in the last three financial years was Rs. 56.37 crore, Rs. 90.34 crore, and Rs. 76.03 crore, respectively.
• The reported EBITDA for FY20, FY21, and FY22 was Rs. 94.60 crore, Rs. 144.77 crore, and Rs. 139.54 crore, respectively.
• The EBITDA margin was Rs. 8.80%, 11.04%, and 8.66%, respectively.
• The company has Debt to Equity Ratio of 0.19 (FY22).

What are Bikaji Foods International's strengths?

• The company has listed its strengths in the RHP. Some of them are mentioned below:
• They are a well-established brand with a pan-India presence. As per the F&S Report, they are among the top three Indian ethnic snack manufacturers in India.
• Bikaji Foods offers a diversified product portfolio focused on various consumer segments and markets.
• The company's manufacturing facilities are strategically located and have stringent quality standards.
• They have an extensive pan-India and global distribution network, arrangements with reputed retail chains and exports channel, and growing eCommerce.

What are Bikaji Foods International's plans for growth and expansion?

• The company plans to implement distinctive growth strategies for its focus markets, core markets, and other markets.
• They plan to establish strategically located new manufacturing facilities to pursue growth in focus and other markets.
• They will invest in advanced technology that will help them optimise their operations further.
• Bikaji Foods plans to strengthen the brand further and increase brand recall as one of India's leading snack brands.

What are the risks associated with Bikaji Foods International's business?

• In RHP, Bikaji Foods has highlighted many risks associated with its business. Some of the risks are highlighted below:
• They are significantly dependent on the sale of their bhujia products. If they are unable to anticipate and adapt to evolving consumer tastes in this segment, the financials will be impacted.
• Its proposed capacity expansion plans relating to the manufacturing facility are subject to the risks of unanticipated delays in implementation and cost overruns.
• They made investments in debt instruments that are not secured.

You can invest in Bikaji Foods International IPO on the Cherry app.