This newly listed IPO surges nearly 40% in 16 sessions; do you own it?

At a time when most of the big initial public offerings (IPOs), including Paytm, Nykaa, Zomato, are struggling at the stock exchange despite a strong rally in the benchmark BSE Sensex, few low-profile companies have delivered solid returns to their investors. Bikaji Foods International is one such stock that has risen as much as 38% in the last sixteen trading sessions, with the share price rising to ₹415.3 apiece intraday on Wednesday, against the issue price of ₹300. The FMCG company made its debut on the domestic bourses on November 16 after successfully raising ₹881-crore through public listing of shares.

Snapping two-session losing streak, Bikaji Foods opened 3.3% higher at ₹408.50 as against the previous closing price of ₹395.55 on the BSE as investors cheered its September quarter earnings report. During the session, the stock jumped 5% to hit an intraday high of ₹415.30, in an otherwise weak broader market. The stock finally settled the day’s trade at ₹407, up 2.9%, while the market capitalisation stood at ₹10,155 crore. The counter hit an all-time high of ₹446.85 on November 29, while it touched a record low of ₹303.05 on November 18.

For the September quarter of 2022 (Q2 FY23), Bikaji Foods posted 43.5% year-on-year growth in net profit to ₹40.92 crore, compared to ₹28.5 crore in the same period last year. Revenue climbed 32% to ₹577 crore as compared to the year-ago period, while EBITDA margin improved to 11.4% as against 10.6% in Q2FY22.

Commenting on the results, Deepak Agarwal, Managing Director, Bikaji Foods lnternational Limited said, “We have seen a healthy and positive growth in revenue as compared to the previous quarter and previous year. In the current quarter, our topline has delivered 37.7% growth as compared to the previous quarter and the same is 31.8% as compared to the same quarter the previous year. We have witnessed good double-digit growth in all categories as compared to the previous year. We have continued to expand our distribution network and we have also started a CSD channel in the current quarter.”

During the July-September quarter, two of its subsidiaries, Hamuman Agro Food Private Limited and Raadhey Namkeen Private Limited, started its commercial production which will help the company to cater the demand of western snacks as well as namkeens.

The IPO of Bikaji Foods, which opened between November 3-7, garnered strong response from investors, with the issue oversubscribing by 26.67 times. The issue, having a price band of ₹285-300 per share, was a complete offer for sale by existing shareholders.

As per the data available on the NSE, the issue of the food company received bids for 55,04,00,900 shares as against 2,06,36,790 shares on offer. The offer received huge demand from qualified institutional buyers (QIBs) as the quota reserved for them was subscribed more than 80 times. The portion reserved for non-institutional bidders was booked 7.1 times and that of retail investors by 4.77 times. The reserved quota for eligible employees was booked 4.38 times.

Besides, the FMCG company had raised ₹262.11 crore from anchor investors by issuing 87,37,194 shares at ₹300 each to 36 anchor investors.

Bikaji Foods International is the third largest ethnic snacks company with six operational manufacturing facilities - four in Bikaner (Rajasthan), one in Guwahati (Assam), and one in Tumakuru (Karnataka). Its product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs (assortment), frozen food, mathri range, and cookies. As of June 30, 2022, the company has operations in 23 states and four union territories in India. It also exports its products to 21 international countries, including North America, Europe, the Middle East, Africa, and Asia Pacific, accounting for 3.20% of total food product sales.