Mrs. Bectors ipo is the second ipo this december. After the bumper listing of burger king’s ipo. Mrs. Bectors IPO is also from a same industry and hence they are related to burger king ipo. The grey market premium for Mrs. Bectors IPO is currently trading at 70% off the issue price.
This IPO’s in the past performing well and Hence this Ipo will also Recieve good response from the investors. The current gmp off this ipo is trading at Rs. 180. The ipo can see increase in premium in upcoming days when the subscribtion day opens.
Grey Market Premium for Mrs. Bector’s IPO :
Grey Market sees good listing gains for this particular ipo. Hence the investors in the grey market applying for this ipo at the Premium of around 70%. The Agents in the grey market asking 500 for application fees and Grey market premium is around Rs 450.
Mrs. Bectors IPO Details :
|IPO Opening Date||Dec 15, 2020|
|IPO Closing Date||Dec 17, 2020|
|Issue Type||Book Built Issue IPO|
|Face Value||Rs. 10 per equity shares|
|IPO Price||Rs.286 to Rs.288 per equity share|
|Market Lot||50 Shares|
|Min Order Quantity||50 Shares|
|Listing At||BSE, NSE|
|Issue Size||Eq Shares of Rs.10|
|Fresh Issue||Eq Shares of Rs.10|
|Offer for Sale||Eq Shares of ₹10|
Min and max application Amount for Bectors Ipo :
|Minimum Amount||1||50||Rs. 14,400|
|Maximum Amt||13||650||Rs. 187,200|
Hey friends! We will talk about a new IPO in today’s article, which will be live on 15 December. You might know the company by the name of Mrs Bectors Cremica. In this article, I will cover this IPO in five parts that will answer all your questions about whether you should apply for it or not? There will be five parts to this article.
Mrs.Bectors Ipo Review Overview and Distribution :
- The first will be unheard information about the IPO that is important learning for you as an investor.
- In the second part I will converse about the business model of this company, its operations, and working.
- In the third part, I will talk about the company’s financials in recent times, its insights, and positive and negative factors as compared to the competitors.
- In the fourth part, the company’s strengths and weaknesses will be discussed. This will include the weaknesses and strengths it offers to its investors.
- In the fifth and last part, we will talk about the important dates that are important for you as an investor when applying for this IPO.
Let’s talk about the first part of this articles learning. IPO- Initial Public Offering means the first time where the company brings its offering for the first time in the open market. Here retail investors like you and me can buy such stocks.
Also Read : LIC IPO Update
Objective off the IPO :
The objective of an IPO is quite important for you to understand as an investor. In previous articles, I had talked about money raised in an IPO. The simple meaning of putting an IPO is to raise money. But as an investor in an IPO, it is important for you to know whether the company will use the raised money in its business or it will be taken by promoters by a stake sale.
In many IPOs, you might have heard the word OFS (Offer for sale). When the amount raised in an IPO comes under OFS, promoters take it through selling their stake. While fresh equity means that the company is going to bring new shares that will be used in its business. Whenever you invest in an IPO you should follow this learning.
When you apply for an IPO (or buy the share of a business) you should check whether the amount will be used in its business or promoters use it for selling their stake. You should pay attention to this because this is important for you as an investor. Check whether your money in an IPO is used for business or buying promoters’ stake. These points are a source of important information for all of you.
Also Read : Stock Market for Beginneers
Mrs. Bectors IPO Business Model :
Now let’s talk about Mrs Bectors Cremica whose brand name might be heard by you. Its business segment includes premium and mid-premium biscuits. It is one of the market leaders in the north Indian states. Besides biscuits, it also produces bakery products. Its products are supplied in 26 states in India. Besides India, its products are exported to 64 other countries . From here you can understand the company’s business. It is the market leader in the north Indian states like Himachal Pradesh, Punjab, J&K, and Ladakh in the premium and sub-premium biscuit segment.
The market size of the biscuit industry of India is Rs.38,000 cr, where this company has a 1% market share. Besides this, I will tell you an interesting fact that will give you happiness as an investor. Before this IPO Burger King had launched its IPO where a lot of people applied. But do you know this company is also related to Burger King? The important business of this company is bakery.
The bun made by the company in the bakery is supplied to Burger King. The burger available at Burger King has the bun supplied from this company. There are restaurants like Crowne Plaza and others in north India where this company supplies its bakery products. From here, you would have understood the business of the company. The major business of the company includes the bakery and biscuit segment. You would have understood the key highlights of its business.
Financial Performances of Mrs.Bectors ipo:
Now let’s talk about the third part of this article, which is the financial numbers. As an investor, these are quite important for you. Before that let’s apply our learning on the IPO size. Mrs Bector Cremica IPO size is Rs.540 cr. It means that retail investors will invest a total amount of Rs.540 cr. But where will this amount go? There are two breakups to this. The first is an Offer for sale (OFS) where the promoters will sell their stake. The majority stake of this IPO i.e. Rs.500 cr out of Rs.540 cr is for OFS. Only the amount of Rs.40 cr is for a fresh issue that will be infused in the company’s business. This information is quite important to you. But how you comprehend this depends on you. I told this to you at the beginning of the article.
Financial Fiqures of Mrs.Bectors Ipo:
Now let’s talk about the financial numbers of the company. First, let’s discuss the company’s revenue and profit. We will watch the numbers of past years and understand the growth seen in them. Firstly let’s talk about the company’s revenue, profit, and past years’ performance. Besides this, we will compare this year’s half performance of 2020 with last year’s. We will first talk about revenue. For FY 2018, the company had revenue of Rs.695 cr and 39.5 cr as its profit after tax(PAT) i.e., net profit.
|Particulars||For the year/period ended (Rs in million)|
|Profit After Tax||388.83||304.03||331.50||358.93|
In FY 2019, the company’s revenue rose to Rs.786 cr, and its net profit fell slightly to 33 cr. Now let’s talk about FY 2020. Here its overall revenue fell from Rs.786 cr to Rs.765 cr. Also, its net profit fell from Rs.33 cr to Rs.30 cr. Comparing the last three years of financial performance with this year (leaving half performance), there has been no significant growth in its revenue or net profit. But an interesting thing in its numbers is the first-half performance.
In the first two quarters (half-year) till September 2020, the company showed great performance in terms of revenue and total profit. If I talk about half-year results, the company’s total revenue has been Rs.438 cr, and till now it has made Rs.38 cr of profit. In last year’s results (in the last FY September quarter), the company made an Rs.10 cr profit while this year it made Rs.38 cr profit. It means that as compared to Rs.10 cr profit of last year the company made Rs.38 cr profit this year. This can be considered a huge number. You should research this jump of numbers in detail. But here I would like to tell you one more thing. If you wish to read all the company’s details and information, you can refer to the red herring prospectus document.
Also Read : Investing For Beginners
Now let’s talk about the second important financial parameter. You always want to carefully see this parameter when you subscribe for an IPO. This is the company’s P/E ratio.
Financial Parameters and Ratios :
- If the company earns Rs.1, then how much is an investor ready to pay for it.
- This company’s P/E ratio is around 54. (as compared to) The entire biscuit industry (with Britannia as a competitor) has an average P/E ratio of Rs.58.
- This generally means that the P/E ratio is high in the entire industry, which is Rs. 58.
- In comparison to this, the P/E ratio of this company is Rs.54. It means that there is not much discount in terms of the P/E ratio in this IPO.
- The P/E ratio of its competitors like Nestle and Britannia is Rs. 85 and Rs. 52 respectively. Even in comparison with Britannia, this company’s P/E ratio is slightly high.
- Besides this another, the financial aspect, i.e., the company’s dividend-giving record, is great. For the last three years, the company has been paying a 7.5% dividend. This can be considered a good number.
- One more financial parameter is ROE- Return on Equity, i.e., the company’s return on its equity. This number is 9.52%. While the ROCE (Return on Capital Employed), i.e., the company’s return on the total capital employed.
- The ROCE percentage of the company is more than 12%. The company’s net profit margin is around 3.7%.
- So this was regarding important numbers. Now let’s talk about the company’s debt to equity ratio. The debt to equity ratio of this company is 0.27.
Strengths of Mrs. Bectors IPO :
- The first strength of this company is a well-diversified portfolio. You can check the products of this company on its website. The portfolio of the company is quite huge. It means that the company makes a variety of products. The company doesn’t face much adverse impact as if one product has a low demand, the other product has a great demand. Hence a great portfolio can be considered a remarkable strength for any company.
- Now let’s discuss the second strength of the company. This company exports its biscuits to 64 countries. In FY 2019, out of the total biscuits exported, this company’s market share was 12%. From here, you can understand that the company’s network outside India is quite great because it can do huge exports.
- The third and most important strength of the company is its experienced management. Because of this company’s distribution network is maintained well both in India or outside India.
- The company also has strong relations with its third parties whom it supplies. This company has stout relations with various vendors. Thus, there is not much risk on its business, and it has a wide distribution network. This can be considered as a strength of the company.
Threats & Weakness of Mrs. Bectors IPO :
- Let’s talk about threats and weaknesses where the company needs to focus. Also, these are important for you to know as an investor. First, the business of the company is quite capital intensive. This means that if the company wants to expand its business in the future, it will have to establish a factory for which a huge investment will be required. A company that is capital intensive needs money from time to time for expansion. So that it can set up its factories to increase its production this will further increase its revenue and profit. The industry in which the company operates is quite capital intensive.
- The second threat/weakness is that competition is quite strong in the company’s sector. Its competitors like Britannia, Parle, and ITC give a cut-throat competition. In recent times it has been seen that the ITC has performed and penetrated well in the biscuit segment. In the coming time, we will have to watch how the company will tackle its competitors; also, the strategies in terms of products and advertisement will increase its market share.
- Last and most important is the net profit margin is 3.97%. This margin is slightly low as compared to other competitors. Here as an investor, you need to see how this company improves its net profits in the future. If you pay attention to such things, then you can surely become an intelligent investor. Whenever you invest in a company, then it is important for these questions to arise in your mind. You can find answers to them by doing the research before investing your money.
Tentative Timetable for Mrs. Bectors IPO :
Now, let’s move to the last part of the article, where we will talk about the important dates of this IPO. The IPO’s opening date is 15 December if you wish, i.e., you can place your bids from this date if you wish to subscribe. The closing date of this IPO is 17 December. From 15- 17 December, you can subscribe to this IPO.
|IPO Open Date||Dec 15, 2020|
|IPO Close Date||Dec 17, 2020|
|Basis of Allotment Date||Dec 22, 2020|
|Initiation of Refunds||Dec 23, 2020|
|Credit of Shares to Demat Account||Dec 24, 2020|
|IPO Listing Date||Dec 28, 2020|
Mrs. Bectors IPO Allotment Date & Status :
Now comes the question of allotment date, i.e., when you will know whether shares have been allotted to you or not. 22 December is this IPO’s allotment date, i.e. when you will know whether shares have been allotted to you or not. The listing date of the company is 28 December.
Mrs. Bectors GMP & Price in grey market :
Let us further discuss the IPO details. The share price of this company, i.e., the price for one lot, is between Rs.286-288 with a minimum and maximum bid of 50 and 650 (13 lots) shares respectively. This company will get listed on both NSE and BSE. Besides this, the major component of this IPO is from Offer for sale. The promoters will sell their stake, whose amount is Rs.500 cr out of Rs.540 cr. Rs.40 cr will be for fresh equity. The promoter’s shareholding is around 52.45%. After the IPO, its ownership will fall from 52.45% to 51%. So these were the details of the entire IPO. then surely do it. Happy investing!