Mrs. Bectors Food Specialities Ltd. - IPO Information Note

Mrs. Bectors Food Specialities Ltd. - IPO Information Note

IPO
by Nikita Bhoota Last Updated: Sep 09, 2021, 08:37 PM IST

Mrs. Bectors Food Specialities Ltd. IPO

This document summarizes a few key points related to the issue and should not be treated as a comprehensive summary. Investors are requested to refer the Red Herring Prospectus for further details regarding the issue, the issuer company and the risk factors before taking any investment decision. Please note that investment in securities is subject to risks including loss of principal amount and past performance is not indicative of future performance. Nothing herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so. This document is not intended to be an advertisement and does not constitute an invitation or form any part of any issue for sale or solicitation of an offer to subscribe for or purchase any securities and neither this document nor anything contained herein shall form the basis for any contract or commitment whatsoever.

 

 

 

Issue Opens- December 15, 2020
Issue Closes- December 17, 2020
Price Band- ? 286- 288
Face Value: ? 10
Public issue: Primary Issue & OFS Aggregating up to 1.86cr shares
Issue Size- ~?541cr
Bid Lot- 50 equity shares
Issue Type: 100% Book building
Post money Market cap of   ? 1,692r - at upper price band #at upper price band
 

 

 

 

 

% Shareholding

Pre IPO

Promoter

52.4

Public

47.6

Source: RHP


Company Background

Mrs. Bectors Food Specialities Limited (MBFSL) is one of the leading companies in the premium and mid-premium biscuits segment and the premium bakery companies in the North Indian (Source: Technopak Report). It manufactures and markets its premium and mid-premium biscuits under its flagship brand ‘Mrs. Bector’s Cremica’ and its bakery products in savory and sweet categories under its brand ‘English Oven’. It caters to retail clients in 26 states within India, as well as to reputed institutional customers with Pan-India presence and to 64 countries across six continents (in FY20). Its products are manufactured at six in-house manufacturing facilities which are strategically located in proximity to its target markets. It has a robust distribution network in India and globally through general trade and the modern trade. During H1FY21, they distributed biscuits across 23 states in India through a widespread distribution network of 196 super-stockists, 748 distributors and supplied to its retail customers through 458,000 retail outlets (Source: Technopak Report) and 4,422 preferred outlets for biscuits segment. They sold their bakery products through 191 distributors and over 14,000 retail outlets for bakery products.

Object of the Offer

The offer comprises of a Fresh Issue (?40.5 cr) and an Offer for Sale (?500cr) aggregating to ?541cr. Proceeds from the fresh issue are proposed to be utilized for financing the project cost towards expansion of the Rajpura Manufacturing Facility in Punjab by establishing a new production line for biscuits.

 

 

Financials

 

 

(? cr, except percentages)

FY18

FY19

FY20

H1FY20

H1FY21

Revenue from operations

694

784

762

365

431

EBITDA

85

96

93

39

72

EBITDA Margins (%)

12.3

12.3

12.2

10.7

16.7

Net Profit

36

33

30

10

39

Diluted EPS

6.26

5.78

5.30

1.77

6.78

ROE (%)

14.30

11.81

9.90

6.68^

21.72^

ROCE (%)

18.00

15.90

12.68

9.33^

24.22^

Operating Cash Flow

47

54

110

38

68

EBITDA to OCF (%)

183.88

178.10

84.81

103.99

106.25

Working capital cycle*

33

35

33

43

25

Source: RHP, ^on annualized basis, * number of days

For additional information and risk factors please refer to the Red Herring Prospectus. Please note that this document is for information purpose only

Key Positives

 

 

  1. Established presence in Institutional bakery business

    MBFSL also manufactures and sells a variety of bakery and frozen products such as buns, kulchas, pizzas, and cakes to institutional clients like QSRs with pan India presence, cloud kitchens, multiplexes, as well as certain hotels, restaurants and cafés. Its list of clients includes McDonald’s (Connaught Plaza Restaurants Pvt. Ltd. & Hardcastle Restaurants Pvt. Ltd.), Burger King India, PVR, Rebel Foods Private Limited, Yum! Restaurants (India) Private Limited, etc. It is sole supplier of burger buns and pan muffins to Connaught Plaza Restaurants, preferred supplier to Hardcastle Restaurants, one of the main supplier of burger buns to Burger King since 2014, leading supplier to PVR since the last 10 years and MBFSL believes that it benefits from our strong association with these customers, including in terms of adoption of stringent quality controls and industry best practices such as use of premium quality raw materials.




  2.  
  3.  
  4. Wide spread and established sales and distribution network

    The company distributes biscuits across 23 states in India, through its widespread network of super stockists and distributors. During H1FY21, its distribution network for sale of biscuits comprised of 196 super stockists and 748 distributors supplying to wide range of customers through 458,000 retail outlets (Source: Technopak Report). It also has a network of 4,422 preferred retail outlets, who through arrangements with MBFSL ensure enhanced brand visibility and presence in their shops by displayed MBFSL products more prominently in their shelves. Apart from traditional retail outlets, the company also operates through modern trade. According to the Technopak Report, MBFSL is the largest suppliers of biscuits to CSD and an approved and listed supplier for Indian Railways having strong presence across Railway Station Canteens and their Stores in North India.

    MBFSL’s distribution network is managed by an in- house sales team of over 403 personnel, as on September 30, 2020, who work closely with super stockists and distributors to understand consumer preferences, receive feedback on its products and that of MBFSL’s competition. This along with their in-house developed automation tool “Peri” enables MBFSL to improve productivity levels of its super stockists and distributors and formulate an effective strategy for sales, marketing and pricing. Moreover, this input is used for new product development and expansion of its product portfolio. The company seeks to increase its distribution through modern trade channels in other regions in India by introducing premium products in biscuits and bakery segments in these new regions. The company believes that it can establish its presence in other regions by leveraging existing business in modern trade channels where they enjoy strong business relations and by collaborating with certain regional players.

 


Key Risk

 

 

 

 

 

  • The continuing impacts of COVID-19 are highly uncertain and unpredictable thus impacting the business performance. Although the sales to retail customers was not impacted significantly during the initial lockdown, the sales to QSR customers, CSDs and Indian Railway canteens and stores were significantly impacted due to COVID-19 pandemic. Possibility of another lockdown may have an adverse effect on its business, results of operations and financial condition.




  •  
  •  
  • Inability to anticipate, respond to and meet tastes, preferences or consistent quality requirements of customers or their inability to accurately predict and successfully adapt to changes in market demand or customer preferences.


Watch this video to know more about Mrs. Bectors Food IPO


 

 

Disclaimer

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