Mrs Bectors Food\'s IPO sails through on high investor appetite
Photo Credit: VCCircle

The initial public offering of biscuit and bread maker Mrs. Bectors Food Specialities Ltd sailed through on the first day of the issue Tuesday with retail investors lapping up the shares on sale.

The offering of 13.23 million shares was covered almost four times after getting bids for over 49 million shares,stock-exchange data showed.

Retail investors bid for almost seven times the quota reserved for them. High-net-worth investors and corporate houses also joined the party, bidding for 40% more shares than their portion.

However, institutional investors stayed on the sidelines and bid for less than 2% of their quota.

The response comes after blockbuster debuts by some companies on the bourses including Burger King India Ltd, whose shares doubled Monday.

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 issue will close on December 17.

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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