Shares of Mrs. Bectors Food Specialities made a strong debut on the bourses on Thursday. The Initial Public Offering (IPO) of the company was concluded last week. The biscuit and bread manufacturer was listed at Rs 500 on the National Stock Exchange (NSE), 74 per cent to its issue price of Rs 288. Within moments of listing the stock surged to the day's highest price of Rs 592.40. The stock was locked in the upper circuit of 20 per cent of Rs 601.20 on BSE.
Before the listing, Mrs Bectors’ IPO fetched the premium of Rs 200 over the expected issue price of Rs 288. This means, the stock has been listed even above the grey market price of Rs 488 and has provided a safer exit to the investors who bought shares from the grey market.
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The shares of Mrs Bectors are one of the few IPOs that have ended on its debut day with a gain of more than 100 per cent. Last week, it was Burger King, a Quick Serving Restaurant (QSR) company, which saw huge investors’ interest on the debut day.
Mrs Bectors stock ended the day at Rs 595.55 on BSE while on NSE it closed at Rs 592.50. The counter most active with 3.71 crore shares changed hands on NSE with the trading turnover of 2,127 crore. The counter ended with a Market Capitalisation (M-Cap) of Rs 3,481 crore.
Mrs Bectors Food Specialities IPO received a huge response as it garnered 198 times subscription and generated bids worth more than Rs 40,000 crore. It’s High Networth Individuals (HNIs) portion was subscribed 620 times while the qualified Institutional Buyers (QIB) portion was subscribed 177 times. The retail category saw 30 times oversubscription.
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Analysts at Angel Broking believe that for the next few years the domestic biscuit and bakery market will grow by 9 per cent due to urbanisation, an increase in disposable income, favourable government policy. On the other hand, the institutional Indian bakery industry is expected to grow by 20 per cent due to the increasing market share of QSR chain.
"We think the company should be able to grow in line with the industry managed by the promoters having more than 25 years of sector knowledge. Company results were better than the industry in the first half of 2020-21," the brokerage had said in its IPO note.
What should investors do?
After a bumper stock market debut for Mrs Bectors, analysts advise resorting to some profit-taking in the short term as the counter has provided stellar returns on debut day. Compared to Mrs Bectors, according to them, there are better investment options available in the market.
"A short-term investor should book profit from the counter. There are better options available in the FMCG space than Mrs Bectors at these valuations," said Keshav Lahoti, Associate Equity Analyst at Angel Broking.
