Shares of popular snack maker Bikaji Foods International made a decent listing on stock market on Wednesday. Bikaji Foods shares opened for trading at Rs 321.50 on the BSE marking an upside 7.2 per cent from initial public offering (IPO) price of Rs 300 on the BSE. On the National Stock Exchange, Bikaji Foods shares rose nearly 8 per cent to open at Rs 323.
The stock rose as much as 11.56 per cent to hit an intraday high of Rs 335 on the NSE and it advanced as much as 12 per cent on the BSE.
Bikaji Foods sold shares in the price band of Rs 285-300 per share during the three-day share sale via IPO which ended on November 7. Retail investors were allowed to make bid for minimum one lot of 50 shares in the IPO up to maximum of 13 lots. At the upper end of the price band, cost of one lot of Bikaji Foods shares was Rs 15,000.
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Bikaji Foods shares were in very high demand during the IPO as the IPO was subscribed 26.67 times. Qualified institutional buyers (QIBs) showed keen interest in the IPO. The portion reserved for them in the IPO was subscribed 80.63 times, shares set aside for non-institutional investors (NIIs) was subscribed 7.1 times and pie set aside for retail investors was booked 4.77 times.
The company had reserved 50 per cent of the IPO for QIBs, 15 per cent for NIIs and 35 per cent for retail shareholders.
Bikaji Foods IPO was purely an offer for sale (OFS) by wherein its existing shareholders sold shares worth Rs 881.22 crore.
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Bikaji Foods International Limited is one of India’s largest fast-moving consumer goods (FMCG) brands. The company’s product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks.
"It had posted decline in margins for FY22 on higher sales in line with the general trends of the industry. Sustainability of such margins going forward amidst stiff competition raise concerns. It has subscribed 26 times in total where investors can expect some listing gains and long term investors can park their funds in this issue," says Manoj Dalmia, founder and director at Proficient Equities.
Valuations wise the stock looks expensive, says Pravesh Gour, senior technical analyst at Swastika Investmart.
"The company’s muted listing but the issue had received a good response from investors on both the institutional as well as retail side. Nevertheless, the company's margins are on the declining side and a P/E valuation of 95.2 looks expensive. Therefore, we advise only aggressive investors should consider making a long-term commitment to the company. Those who applied for listing gains can maintain a stop loss of Rs 310," he says.
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