India: Mrs Bectors Foods $73m IPO To Open On December 15

Mrs Bectors Food Specialties Ltd IPO comes at a time of retail euphoria with stock markets hitting fresh highs. Burger King India Ltd which operates in a similar consumer facing segment saw a robust subscription of its ₹810 crore IPO. The issue which will make stock markets debut next week was subscribed 156.65 times with retail portion at 68.15 times.

Mrs Bectors Food IPO comprises a fresh issue of equity shares and an offer for sale of aggregating by Linus Private Limited, Mabel Private Limited, GW Crown PTE. Ltd and GW Confectionary PTE. Ltd. Part of the proceeds from stake sale will be used to finance project cost towards Rajpura Expansion Project by establishing a new production line for biscuits. Promoter of the company including Anoop Bector, his family and a family trust own 52.40% in Mrs Bectors Food.

Mrs Bectors manufactures and sells biscuits primarily in the premium and mid-premium biscuits segment and the premium bakery segment in North India. It manufactures and markets a range of biscuits such as cookies, creams, crackers and digestives under our flagship brand ‘Mrs. Bector’s Cremica’. It also manufactures and markets bakery products in savoury and sweet categories which include breads, buns, pizza bases and cakes under our brand ‘English Oven’.

Biscuits contributed 59.20%, 68.26% and 60% of its revenue from operations for FY20, April to September 30, 2020, and April to September 2019 respectively. It also manufactures ‘Oreo’ biscuits and ‘Chocobakes’ cookies on contract basis for Mondelez India Foods Private Limited.

Mrs Bectors manufactures and sells a variety of bakery and frozen products such as buns, kulchas, pizzas, and cakes for quick service restaurants (QSR) customers with pan India presence, cloud kitchens such as Rebel Foods Private Limited as well as PVR Limited. It is the sole supplier of burger buns and pan muffins (frozen) to Connaught Plaza Restaurants Private Limited and Hardcastle Restaurants Private Limited.

Mrs Bectors also sells various types of premium bakery products in savoury and sweets categories such as breads, buns, pizza bases, and cakes under the ‘English Oven’ brand, which caters to the premium segment in Delhi NCR, Mumbai, and Bengaluru.

In the red herring prospectus the company said that continuing effect of the covid-19 pandemic is a risk for the business. “As a result of covid-19, in order to prevent the shortage of raw materials, we have maintained additional raw materials for our production. However, continued supply disruptions could exert pressure on our costs, and we cannot assure you that all or part of any increased costs can be passed along to our consumers in a timely manner or at all, which could negatively affect our business, results of operations and financial condition,” it said in the RHP.

SBI Capital Markets Limited, ICICI Securities Limited and IIFL Securities Limited are the book running lead managers to the offer.