India: Mrs Bectors Food IPO Off To Strong Start On Strong Retail Demand
The initial public offer of Mrs Bectors Food Specialities, which opened today, was subscribed 3.72 times at close of Day 1. The issue will close on December 17. This is the second initial public offer this month to have received over-subscription in the first few hours itself after Burger King India.
The retail segment was subscribed 6.83 times.
The initial public offer (IPO) received bids for 4,92,53,700 shares, against 1,32,36,211 shares on offer, according to data available with the NSE.
The IPO of Burger King, which listed on Monday, was also oversubscribed in first few hours on Day 1. After more than doubling in price on listing day, Burger King shares today hit the 20% upper circuit limit today.
Mrs Bectors Food IPO comprises a fresh issue of ₹40.54 crore and an offer-for-sale of up to ₹500 crore. Price range for the IPO has been fixed at ₹286-288 per share.
On Monday, Mrs Bectors Food Specialities raised ₹162 crore from anchor investors. SBI Capital Markets, ICICI Securities and IIFL Securities are the managers to the offer.
Mrs Bectors Food manufactures and markets a range of products such as biscuits, breads and buns. It markets a wide variety of biscuits and breads under the flagship brand ‘Mrs Bector’s Cremica’ and the ‘English Oven’, respectively.
Many analysts have recommended “subscribe” to the IPO.
“At the upper end of the IPO price band, it is offered at 28.1x its TTM (trailing twelve months) earnings, demanding ₹16,918 million market cap, which we believe is quite reasonable. Further, its listed peers like DFM Foods and ADF Foods are currently trading at 50.5x and 24.9x respectively of its TTM earnings. We further believe that there is a good possibility of listing gains given lower valuations as compared to other listed peers. Further considering attractive valuation and strong future growth prospects in packaged biscuits we recommend a “Subscribe” rating to this IPO for the long term,” domestic brokerage Anand Rathi said in a note.
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