new Delhi: The IPO of FMCG company Mrs. Bector will open for subscription on 15 December (Tuesday). The company plans to raise Rs 541 crore from the primary market. Many analysts have been advised to ‘subscribe’ to this issue.
Analysts have expressed confidence in the company’s improved business figures, falling debt and positive cash flow. The company is a big name in the biscuits, buns and bread market. Due to economical valuation, investors can get good benefits from investing in the issue.
The company has kept a price band of Rs 286-288 for the issue. A lot is of 50 shares. The company is going to offer Rs 500 shares in the issue under the offer for sale, while fresh shares worth Rs 40.5 crore will also be issued. Know what is the opinion of brokerage companies about this issue:
LKP Securities: Subscribe
At a price of Rs 288, it has a valuation of 28 times and EPS of Rs 10.32, which looks quite attractive. The brokerage has expressed confidence in its strong network, basic strength and excellent prospects.
The brokerage said the company had a positive cash flow of Rs 31.5 crore in the first half of FY 2020-21, which was negative Rs 71.5 crore during FY 2017-18. The working capital of the company has also reduced from 33 days to 25 days and debt has also decreased.
SAMCO Securities: Subscribe for Listing Gain
Nirali Shah of SAMCO Securities said that Mrs Bector’s biscuit brand ‘Creamika’ is one of the well-known brands in North India, which has around 4.5 per cent market share. In the case of bread and bun, its brand ‘English Oven’ has a strong hold.
The company supplies bread to PVR, Burger King and McDonald’s, which makes up 22 per cent of its revenue. Shah said, “From FY 2016-17 to FY 2018-19, the company achieved 12% revenue growth, while Britannia grew at 10%.”
He said that the performance of the company has improved during the epidemic, but there are many challenges ahead, due to which it eats out. He advised investors to invest only for listing gains.
Angel Broking: Subscribe for listing and long-term profit
Keshav Lahoti of Angel Broking believes that India’s biscuits and bakery market is set to grow at 9 per cent in the coming years due to urbanization, income growth and government policies. He said that due to the growth in the QSR segment, the institutional bakery industry will grow at a rate of 20 per cent.
He said that the company is available at a much lower price than companies like Britannia Industries, Nestle India, Pratap Snacks, DFM Foods. He has advised to subscribe to the issue.
Prabhudas Leeladhar: Subscribe
The brokerage said that despite being the best brand in North India, the company holds only 4.5 per cent stake. According to the brokerage, margin expansion is expected in the current financial year. According to the brokerage, the company can improve its market share by improving distribution.
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