The initial public offering of biscuit and bread maker Mrs Bectors Food Specialities Ltd was subscribed more than 198 times on the third and final day of the issue as institutional investors and high net worth investors piled into the IPO.
The offering of 13.23 million shares had received bids for over 2.6 billion shares, of which 154 million were at the cutoff price, stock-exchange data showed.
Retail investors bid for 29 times the quota reserved for them. High net worth investors and corporate houses bid for 620 times the shares set aside for them.
Institutional investors, which had stayed on the sidelines on Day One, joined the party as their quota was covered around 177 times.
The IPO had sailed through on Tuesday itself, thanks mainly to retail investors.
Overall, it is believed to be the third-best show in terms of oversubscription in a decade behind Salasar Techno (273x) and Astron Paper (243x). There have been few other such bumper issues in the past including Sankhya Infotech (283x) during the dot com boom. But all such IPOs were tiny in comparison and Mrs. Bectors has had a record show for an issue of the size of Rs 100 crore and above.
To be sure, high subscription interest is not a guarantee of a great show immediately or later on the bourses. Several companies that attracted such investor frenzy historically trade as penny stocks today.
The strong response comes on the back of a conservative pricing of the issue and 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.
This may prompt other food companies waiting on the sidelines to expedite their public float plans.
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 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 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.