Bikaji Foods IPO Review

Bikaji Foods IPO has an issue size of Rs. 881.22 Cr. · The price band for Bikaji Food International IPO is Rs 285 to Rs 300.Bikaji Foods was the largest manufacturer of Bikaneri bhujia and the second largest manufacturer of handmade papad in Fiscal 2022.  It is the second fastest-growing company with a CAGR of 21.3 percent from FY2019 to FY2022 in the Indian organized snacks market.

Bidding date3rd Nov – 7th Nov’2022
Issue size (shares)OFS of 29,373,984 Equity share
Issue Size  (Rs. Cr. )₹ 837 – 881 Cr
Face Value in Rs. 1
Bid Lot shares50 and multiples
Price Band₹ 285 – 300
Issue Structure :

About Bikaji Foods International Ltd.

  • Bikaji Foods International Limited is one of India’s largest fast-moving consumer goods (“FMCG”) brands.
  • Bikaji Foods International Limited (“Bikaji”) was incorporated on October 6.
  • Bikaji is the 3rd largest ethnic snacks company in India with an international footprint
  • It is the 2nd fastest growing company in the Indian organised snacks market In Fiscal 2022, they were largest manufacturer of Bikaneri bhujia with annual
    production of 29,380 tonnes, and they were the 2nd largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes .
  • They are also the 3rd largest player in the organised sweets market with annual capacity of 24,000 tonnes for packaged rasgulla, 23,040 tonnes for soan
    papdi and 12,000 tonnes for gulab jamun.
  • Company’s product range includes 6 principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which
    primarily includes gift packs (assortment), frozen food, mathri range and cookies. In the 3 months ended June 30, 2022, they sold more than 300
    products under the Bikaji brand.
  • Over the years Bikaji has established market leadership in the ethnic snacks market in their core states of Rajasthan, Assam and Bihar and have gradually
    expanded their footprint across India, with operations across 23 states and 4 union territories as of June 30, 2022.
  • Bikaji has developed a large pan-India distribution network. As of June 30, 2022, they had 6 depots, 38 super-stockists, 416 direct and 1,956 indirect
    distributors that work with their super-stockists.
  • Bikaji has 7 manufacturing facilities that are operated by them, with 4 facilities located in Bikaner, 1 in Guwahati, 1 in Tumakuru and 1 in Muzaffarpur.

Anchor Book: Bikaji Foods IPO

  • Bikaji Foods International raised ₹262 crore from 36 anchor investors at the upper price band of ₹300 per share. Mutual funds subscribed to 42.16% of the total anchor book size which was allocated to 10 mutual funds through 17 schemes amounting to ₹110.51 crore.
  • Tata Mutual Fund, Aditya Birla Sun Life, Canara Robeco, ICICI Prudential MF, WhiteOak Capital, Nippon Life India, Kotak MF, Quant MF, HDFC MF and Edelweiss MF were the mutual funds that were allocated shares in the company.
  • foreign portfolio investors including Eastspring Investments, Morgan Stanley, Government of Singapore, Nomura, Blackrock, Neuberger Berman, Carmignac, Goldman Sachs, Bay Capital and Kotak Funds.
  • Some select investors include

Bikaji Foods IPO : Financials

Particulars / (₹ Cr)2022(03) 2021(03) 2022(12) 2021(12) 2020(12) 
Revenue from Operations 419.16334.051610.961,310.751,074.55
Revenue Growth (%) 25.48%– 22.90%21.98%
EBITDA as stated 30.7925.99139.54144.7794.6
EBITDA Margin (%)  7.35%7.78%8.66%11.04%8.80%
Profit Before Tax 21.7918.38105.01120.1163.64
Net Profit After Tax 15.712.4176.0390.3456.37
Net Profit (%) as stated 3.75%3.72%4.72%6.89%5.25%
Equity Share Capital 24.9524.3124.9524.3124.31
Net worth as stated 834.8618.45819.26604.1529.17
EPS – Basic & Diluted (₹) 0.650.533.153.712.32
RONW (%)  1.94%2.09%9.51%14.93%10.65%
NAV (₹ ) 33.4625.4432.8324.8521.76
Post Issue share Cap24.95
FV in Rs. 1
IPO price300
EPS post IPO FY223.05
PE 98.4
EPS post IPO FY23 ann2.5
PE  FY23 ann119.0
Market Cap Rs. Cr. 7485
Market Cap/Sales4.65

Salient Points: Bikaji Foods IPO

  • The company is the market leader in the family pack segment, with 60.57% share of business coming from SKUs other than Rs 5 and Rs 10 packs in FY2022.
  • Enjoys ~ 45%, ~58% and ~29% share in its core markets of the states Rajasthan, Assam and Bihar.
  • THe OFS is by The IPO will be complete offer for sale of Rs 881.22 crore by existing shareholders Shiv Ratan Agarwal, Deepak Agarwal, India 2020 Maharaja, Intensive Softshare, IIFL Special Opportunities Fund and Avendus Future Leaders Fund.
  • Bikaji Foods manufacturing facilities are equipped with modern and automated production processes, custom-made manufacturing equipment obtained from national and international suppliers.


  • Capacity expansion plans relating to its manufacturing facility and contract-manufacturing facilities are subject to the risks of unanticipated delays and cost overruns.
  • intense competition in the Indian snack food market, from various domestic and multinational companies.
  • The company has made investments in unsecured debt instruments of Hanuman Agrofood in the form of compulsory convertible debentures amounting to Rs 106.23 crore, as of June 30, 2022.
  • There were certain procedural instance of lapses such as delays in filings and non-filing of forms, non-compliance with procedural requirements for allotment of non-voting shares and variation of rights of such shares, and factual errors in its corporate records.
  • Prone to various contamination-related risks, which typically affect the FMCG industry, including product tampering; relatively short shelf life of certain of its products; improper storage of products and raw materials; adulteration of products etc.
  • No formal hedging policy in place
  • Relies on limited number of super-stockists and third-party transportation providers.
  • A part of company’s dependent on contract manufacturing facilities. 

Peers: Bikaji Foods IPO

CompanyCMPFV Income (cr)Net ProfitNPMEPS  TTMP/E  P/BV  Mcap Mcap/ Sales
Britannia Inds. 3,804114136151610.7%65.757.9035.8916316.5
Nestle India 204251014709214414.6%65.67311.0284.61,96,93213.4
DFM Foods 3752554-37.44-6.8%-ve-ve30.518853.4
Prataap Snacks 91351,3972.910.2%1.24736.293.421411.5
Bikaji Foods30011610.9676.024.7%3.2193.469.07,4854.6

Bikaji Foods IPO: Assessment

  • Bikaji has established their brand as the preferred home consumption snacking brand for families. Bikaji is a Well-established brand with pan-India recognition.
  • Extensive distribution network in India: As of June 30, 2022, Bikaji had 6 depots, 38 super-stockists, 416 direct and 1,956 indirect distributors that work with its super-stockists, located across 23 states and 4 union territories in India.
  • The company sells through distributors, retail chains, e-commerce and exports channel. In Q1 FY2023, general Trade contributed 85.45% to sales , new or modern trade 5.7%, exports 3.2%, e-commerce 0.82% and others 4.83%.
  • The company intends to operationalize 2 additional manufacturing facilities, of which 1 in Rajasthan will be operated and will manufacture frozen snacks and sweets products, and for the remaining manufacturing facilities in Bihar, the company has entered into contract manufacturing agreements for the manufacture of namkeen and western snacks.
  • Bikaji Foods recorded an increase in sales of food products at a CAGR of 22.25% between FY2020 and FY2022.
  • Thus it has a track record of consistent revenue growth and profitability, even during tough periods due to pandemic.
  • Low debt levels.
  • Besides its core markets of Rajasthan, Assam and Bihar where it has dominant share, Bikaji Foods is planning to expand in adjacent states.
  • The company has undertaken several brand-building initiatives in the past to increase its brand recall among consumers.
  • Biikaji Foods IPO is being Offered at valuation at 98X FY22 earning & 119X Q1 FY 23 earnings annualized making it bit costly. TTM EPS works out to Rs 3.26.translating to a P/E of 92.11x.
  • Being 100% OFS issue, means nothing will accrue to company.
  • Company seems to have good reputation needed for this line of business.
  • Bikaji IPOs has some merits though lacks comfort on valuation.
  • I may or may not apply in Bikaji Foods IPO. May apply for a small portion. Will take a call on last day on the allocation to be done between Medanta & Bikaji IPO.
  • Coming to which IPO to prefer Bikaji Foods or Medanta, in general snacks companies have historically delivered returns to investors on listing whereas hospitals have faired poorly on listing. However in past few months hospitals have gained good traction with investors due to expected growth, insurance led patients and overall change in perception.

Bikaji Foods IPO : Apply or Not

Risk : Moderate
Expected Reward : Low profit or small loss.
Listing Gains : Not sure. could be a low gain. Current GMP ~ Rs. 10-15
Hold for Medium/ Long Term: Looks OK buy valuation is bit stretched.
Subscription : QIB figure will be watched. Others will follow.
I may apply for a small portion in Bikaji Foods IPO on Day3. Will apply only if good QIB traction on Day 3 along with HNI response. Quantum depends on response else will put in small application. Also funds are quite streched due to many IPOs.
Above are my views only. Please do your own diligence.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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