Today the IPO of Mrs. Bector will open, should you invest money?

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Today the IPO of Mrs. Bector will open, should you invest money?

The Rs 541 crore IPO of Mrs. Bectors Food Specialties will open for subscription on Tuesday. This issue can be subscribed till 17 December.

Updated: Dec 15, 2020, 10.46 AM IST

Companies like Britannia Industries, ITC, Parle are giving a tough challenge to Mrs. Bector. Companies such as DFM Foods and Pratap Snacks are also challenging it.
ET Intelligence Group: The Rs 541 crore IPO of Mrs. Bectors Food Specialties (MBFS), a company that makes biscuits and bakery products, will open for subscription on Tuesday i.e. Tuesday. This issue can be subscribed till Thursday i.e. December 17.

In this issue, the company is offering shares worth Rs 500 crore under the offer for sale, while fresh shares worth Rs 40.5 crore will be issued. The company is expanding its unit in Rajpura as well as giving existing partners an exit opportunity.

A nationwide distribution network, domestic production, good penetration in the export market, margins of more than 10 per cent and low debt-equity ratio go in favor of the company, while the rapidly growing competition and small size of the operations push the company back.

Read also: Keep these things in mind, there will be no mistake in filing income tax return

There are many challenges ahead of the company in the short term. For this reason, this IPO seems suitable for long-term investment for high risk investors.

Functioning and financial health

Cremica and English Oven are among the renowned bakery brands in North India. The company has performed well in the first half of the current financial year. Domestic consumption increased rapidly during the lockdown. During this time, the company also saved a lot in advertising and travel expenses.

The net debt of the company declined to Rs 103 crore by September 2020, from Rs 133 crore in FY 2017-18. During this period, the working capital of the company slipped from 33 days to 25 days. The net profit of the company in this half year was Rs 38.8 crore, which was Rs 30.4 crore in the last full year.

Bector-highlights

What is valuation

After the IPO, the price-to-earnings ratio of the company is estimated at 27.7 times based on the estimated profit for the financial year 2020-21. This is much less than 54 times the financial year 2019-20. The performance of the company looks good during the current financial year.

On the other hand, companies like Britannia Industries, ITC, Parle are giving a tough challenge to Mrs. Bector. Apart from this, companies like DFM Foods and Pratap Snacks are also challenging it.

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Topic

Mrs. Bector IPO

ITC

Mrs. Bectors Food Specialties

DFM Foods

Share Market

Britannia Industries

Pratna snacks

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