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Mrs Bectors Food IPO covered over 11 times on second day
Photo Credit: Thinkstock

The initial public offering of biscuit and bread maker Mrs. Bectors Food Specialities Ltd was subscribed more than 11 times on the second day of the issue as it continued to attract investors.

The offering of 13.23 million shares had received bids for over 150 million shares by Wednesday evening, stock-exchange data showed.

Retail investors bid for 16.3 times the quota reserved for them. High-net-worth investors and corporate houses bid for 8.6 times the shares set aside for them.

Institutional investors, who had stayed on the sidelines on Tuesday, joined the party as their quota was covered 4.6 times.

The IPO had sailed through on Tuesday itself, thanks mainly to retail investors. The issue will close on Thursday.

The strong response comes after blockbuster debuts by some companies on the bourses including Burger King India Ltd, whose shares doubled Monday. Shares of Burger King have jumped further and are now triple the IPO price.

Ahead of the IPO, Mrs. Bectors raised Rs 162 crore ($22 million) from a bunch of anchor investors. The company allotted 5.625 million shares to 15 anchor investors at the upper end of its price band of Rs 286-288.

The buyers included funds managed by foreign portfolio investors Nomura, Goldman Sachs and Macquarie. Local hedge fund Abakkus and seven mutual funds also subscribed to the shares.

Three local insurers—HDFC Life Insurance Company, Bajaj Allianz Life Insurance Company and Aditya Birla Sun Life Insurance Company—were also among the anchor investors.

Mrs. Bectors Food, which sells English Oven bread and biscuits under the flagship brand Mrs Bector's Cremica, will issue new shares to raise Rs 40 crore in the IPO. Private equity firms CX Partners and Gateway Partners will sell shares worth Rs 500 crore, shows the draft prospectus filed with the Securities and Exchange Board of India (SEBI).

The company is aiming at a valuation of Rs 1,700 crore ($230 million), back-of-the-envelope calculations suggest.

The company had refiled its IPO proposal in October and trimmed the issue size. It had initially filed its draft proposal in August 2018 with an aim to provide a partial exit to its PE investors, but didn’t go through with the IPO at the time.

Mrs Bectors Foods was founded by Rajni Bector in 1978. It operates in both the business-to-business (B2B) and business-to-consumer (B2C) packaged foods and bakery product segment.

It was earlier controlled by three siblings — Anoop, Akshay and Ajay Bector — with equal shareholding. As part of a 2013 family settlement, Anoop and Ajay took charge of the biscuits and bakery unit while Akshay now heads the condiments business – Cremica Food Industries Pvt. Ltd. The two companies share the Cremica brand but operate independently.

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