Last Updated on Aug 17, 2021 by Kushal Dudheria
Despite receiving SEBI’s nod to go public in 2018, Ludhiana-based buns and biscuit maker Mrs. Bector’s deferred its IPO due to unfavourable market conditions. After a failed first attempt, Mrs. Bector’s is back with its second attempt. Here’s everything you need to know before subscribing to the issue.
The article covers:
About Mrs. Bector’s Food Specialities Ltd (MBFS)
Competitors of Mrs. Bector’s Food Specialities
Market share of brands in the biscuit market
Objectives of Mrs. Bector’s IPO
Registrar and lead managers of the IPO
Key strengths of Mrs. Bector’s
Risks of Mrs. Bector’s Food Specialities
Prospects and financials of Mrs. Bector’s
Table of Contents
About Mrs. Bector’s Food Specialities Ltd (MBFS)
Incorporated in 1995 by Mrs Rajni Bector, Mrs. Bector’s Food Specialities is a leading company in the premium bakery and premium and mid-premium biscuits segments in North India boasting a 4.5% market share.
Products of Mrs. Bector’s
Mrs. Bector’s is involved in the manufacturing and marketing of a range of biscuits and bakery products. All of its products are manufactured in 6 in-house units located across 5 cities. Here’s a glimpse of Mrs. Bector’s’ product portfolio:
Biscuit products
Mrs. Bector’s manufactures and markets its biscuit products under the flagship brand ‘Mrs. Bector’s Cremica’; these include:
- Creams
- Cookies
- Crackers
- Digestives
- Glucose
Bakery products
Mrs. Bector’s offers 152 sweet and savoury bakery products under the brand ‘English Oven’, which include:
- Breads
- Buns
- Pizza bases
- Cakes
- Kulcha
Mrs. Bector’s also manufactures ‘Chocobakes’ cookies and ‘Oreo’ biscuits on a contract basis for Mondelez India Foods Private Limited. Moreover, capitalising on food trends, Mrs. Bector’s Food Specialities has also launched multigrain bread and sub breads for DIY sandwiches.
Clients of Mrs. Bector’s
Mrs. Bector’s serves both domestic and international markets. In the domestic markets, the company has retail clients across 26 states and institutional customers pan India. Outside India, Mrs. Bector’s caters to clients in 64 countries across 6 continents. Mrs. Bector’s also exports biscuits under its own brand and third-party private labels to well-known retail chains and distributors in over 64 countries. Its biscuits export market has a ~12% market share.
Mrs. Bector’s is one of the largest suppliers of buns to leading Quick Service Restaurant chains in India. These include Burger King India Limited, McDonald’s, Hardcastle Restaurants Private Limited, KFC, Connaught Plaza Restaurants Private Limited, and Yum! Restaurants (India) Private Limited. That apart, the bread maker also caters its bakery and frozen products to cloud kitchens and multiplexes. Mrs. Bector’s is also one of the largest suppliers of biscuits to Canteen Stores Department of Government of India (CSD) and an approved and listed supplier for Indian Railways in North India.
Competitors of Mrs. Bector’s Food Specialities
In the biscuits market, Mrs. Bector’s competes with domestic and multinational players in India such as Parle Biscuits, Britannia Industries, ITC, Anmol Industries, and Surya Agro Food. In the bakery market, Mrs. Bector’s competitors include Britannia Industries, Modern Food Industries (India), Harvest Gold Foods India, and Bonn Nutrients.
Market share of brands in the biscuit market
Source: Bloomberg quint
About Mrs. Bector’s IPO
- Mrs. Bector’s Food Specialities IPO comprises of:
- a. A fresh issue of equity shares worth Rs 40.5 cr
- b. An offer for sale of Rs 500 cr by its existing shareholders GW Confectionary PTE. Ltd., Linus Pvt Ltd, GW Confectionary PTE. Ltd., GW Crown PTE. Ltd and Mabel Pvt Ltd.
- The price band of the issue is Rs 286 to 288 per share. The issue, whose bid lot size is 50 shares, opens today and closes on 17th Dec 2020
- While 35% of the issue is reserved for retail investors, 50% is earmarked for qualified institutional buyers and 15% for non-institutional buyers. Retail-individual investors can apply for up to 13 lots
- Shares aggregating up to Rs 50 lakh are earmarked under the Employee Reservation Portion, which offers eligible employees a discount of Rs 15 per share
- Shares will be allotted on 22nd Dec 2020 and are likely to be listed both the BSE and NSE on 28th Dec 2020
Objectives of Mrs. Bector’s IPO
By going public, Mrs. Bector’s looks to:
- Enhance its visibility and allow an exit route to its existing shareholders
- Fund the expansion of Rajpura facility to establish a new production line for biscuits (so far, the company has invested Rs 258.5 cr between FY 2018 to Sep 2020 towards capacity expansion).
- General corporate purposes
Registrar and lead managers of the IPO
Link Intime India Private Limited is the registrar of the IPO and SBI Capital Markets, ICICI Securities, and IIFL Securities are the Book Running Lead Managers.
Key strengths of Mrs. Bector’s
- The company boasts a strong product portfolio in the bakery and biscuits category, a well-established and widespread distribution network, and the status of a preferred supplier to some of the largest QSR players in the country
- Mrs. Bector’s is among the top 2 Indian biscuit manufacturers in the premium and mid-premium segment in states including Himachal Pradesh, Punjab, Jammu and Kashmir, and Ladakh
- In FY 2020, Mrs. Bector’s had a market share of 4.5% of the premium and mid-premium biscuits market in North India as of FY 2020
- Being a major supplier to well-known QSR players in India, Mrs. Bector’s enjoys an enhanced brand visibility
Risks of Mrs. Bector’s Food Specialities
- The company is restricted from launching a new category under “Cremica” owing to restriction on the use of its brand name Mrs Bector’s Cremica
- Mrs. Bector’s faces stiff competition from its well-established domestic and international peers
- It is highly dependent on northern India for revenue growth
- Mrs. Bector’s premium category might not appeal to the rural and semi-urban markets
- The bread maker doesn’t have long-term contracts with its QSR clients
- The impact of coronavirus pandemic on the QSR sector still lingers, which has delayed the revival of business in the segment
Prospects and financials of Mrs. Bector’s
Managed by promoters having a sector knowledge of over 25 years, analysts opine that Mrs. Bector’s Food Specialities has attractive growth prospects.
Talking about its financials, here’s a comparison of a few metrics
| 2018 | 2019 | 2020 | 6-mth ended 30th Sep 2019 | 6-mth ended 30th Sep 2020 | |
| Revenue from operations | 694 | 784 | 762 | 364.6 | 431 |
| EBITDA | 87.3 | 98.4 | 95.6 | 40.5 | 79.6 |
| Net Profit | 35.9 | 33.2 | 30.4 | 10.2 | 38.9 |
Source: Bloomberg quint
The CAGR of Mrs. Bector’s vs Britannia for FY 2017 – FY 2019
Segment-wise revenue breakup for H1 FY 2021
Other details are:
- Mrs. Bector’s EBITDA grew at 84.94% from H1 FY 2020 to H1 FY 2021
- Its EPS grew from 5.30 in FY 2020 to 13.56 for H1 FY 2021
- Its retail bakery business grew at a 29% CAGR over FY2018 – FY 2020 and has gross margins of 53.5%
- The company also boasts a favourable dividend policy and has paid 7.5% dividend annually for the last 3 financial years
- Its net debt has reduced from around Rs 133 cr in FY 2018 to Rs 107 cr in H1 FY2021
- Based on the PE ratio, Mrs. Bector’s IPO is attractively priced compared to the higher valuations of its listed peers. Here’s a detailed table
| Company | PE ratio |
| Britannia Industries | 50.2 |
| Nestle India | 85.6 |
| Prataap Snacks | 57.1 |
| DFM Foods | 97.6 |
| Mrs. Bector’s | 27.9 |
A fast-growing quick service restaurant segment in India could fuel Mrs. Bector’s growth, provided it tides over the impact of the pandemic and also manages its risks well. While we hope the article offers the necessary information to help you decide whether or not to subscribe to Mrs. Bector’s IPO, we encourage you to only take a call after doing your homework. Meanwhile, feel free to let us know how you are lovin’ this information 🙂
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