The initial public offer (IPO) of Bikaji Foods International got fully subscribed on Day 2 of the bidding process. The IPO received bids for 2,15,79,650 shares against the issue size of 2,06,36,790 shares.
The issue is purely an offer for sale (OFS) of 29,373,984 shares, which is being sold in the 285-300 price band. The lot size is 50 shares.
Read more: Bikaji Foods IPO expensively priced: Analyst views, GMP, price band, lot size & more
According to Geojit Financial Services, the IPO is demanding a valuation of 98.5 times FY22 EPS, which appears expensive compared to its peers.
“Considering Bikaji’s consistent top-line growth, industry-leading position, future expansion plans, new product launches, investments in strengthening the brand recall and good future prospects for the packaged food business, we assign a ‘Subscribe’ rating on a short-term basis for high-risk investors,” the brokerage added.
Angel Broking has a ‘subscribe’ rating on the issue. It noted that Bikaji saw better revenue and PAT growth over the last two years and also has a strong brand recall.
Bikaji is the third largest ethnic snack company in India. It has four manufacturing facilities, with a total manufacturing capacity of 400 TPD, producing 300 products such as Bhujia, Namkeen, papad, Western snacks and cookies amongst others. Bhujia accounts for nearly 35 per cent of its sales.
Overall, Bikaji operated in 23 states and four union territories as of June 30 and has market leadership in the ethnic snacks market in Rajasthan, Assam, and Bihar. It also exports its products to 21 international countries, which account for 3.2 per cent of its total sales.
“Bikaji IPO is expensively valued and leaves little room for upside amid a volatile market. Meanwhile, since rural India is under pressure, there are headwinds in the microfinance industry and hence investors should remain cautious over the Fusion Micro Finance issue,” said Arijit Malakar, Head of Research for Retail, Ashika Group.
“BFIL, with its strong market position across its diversified product portfolio, strong distribution, strategic manufacturing facilities, strong brand visibility and consistent financial performance is in a good position with healthy visibility going ahead,” said LKP Securities in a note.