IPO means initial public offering of shares through which company raises money.
This is the 15th IPO in 2020 after SBI Card, Mindspace Business Parks REIT, Route Mobile, Happiest Minds Technologies,Rossari Biotech, Chemcon Speciality Chemicals, Angel Broking, Mazagon Dock Shipbuilders, UTI AMC, Likhitha Infrastructure, Computer Age Management Services, Equitas Small Finance Bank, Gland Pharma and Burger King India.
The company plans to raise Rs 540.54 crore through this IPO.
The IPO consists of a fresh issue of Rs 40.54 crore and an offer for sale of Rs 500 crore by selling shareholders. So the amount of 40 cr would only be used for business by the company and rest would be given to the selling share holders.
The selling parties are:
1)Linus Private Limited will sell equity shares worth Rs 245 cr
2)Mabel Private Limited – Rs 38.5 cr
3)GW Crown PTE Ltd – Rs 186 cr
4)GW Confectionary PTE Ltd – Rs 30.5 cr.
The funds would be used to expand the company’s Rajpura manufacturing facility.
Company has most of the presence in North India and is mainly in the biscuit and bakery segment. It manufactures and markets a range of biscuits such as cookies, creams, crackers, digestives and glucose – under flagship brand ‘Mrs Bector’s Cremica’.
The company also manufactures bakery products in savoury and sweet categories which include breads, buns, pizza base and cakes under brand ‘English Oven’.
The company supplies bakery products to around 26 states all over India and to 64 countries abroad which means growth potential is good for the company.
The strengths of the company is that it is an major exporter of biscuits, good management and good distribution network. From time to time, it offers good dividends to it’s share holders. They have a good relationship with the vendors.
The competition is huge in this sector with the likes of Brittania, ITC and Parle.
So it would be interesting to see how Mrs Bector copes with it. There is huge scope for the company to grow and let’s how it implements it.
Financials:
In the financial year FY18 to FY20, company registered a revenue growth at a CAGR of 5 percent, but profit declined at a CAGR of 8 percent in same period. However, its financial performance started improving in FY21 with profit at Rs 39 crore on revenue of Rs 431 crore in first half of FY21.
So the financials looks OK but not very good.
Market Share:
Important dates:
15th-17th december – IPO opens
22nd – allotment date
Listing – 28th december
Analyse and take the decision which you think is correct.