After Burger king Mrs. Bectors IPO is Baking in line

IPO News 21 December 2020 2:46:PM

Mrs-Bectors-IPO-min

After the success of Burger king's IPO, now bakery products maker Mrs. Bectors plans to raise rs. 540.54 cr IPO This includes a fresh issue of Rs 40.54 crore and a bid by shareholders for the sale of Rs 500 crore. The IPO of Mrs bectors will open for subscription on December 15th, with the price band of Rs. 286 to 288 per share.

A glance at other offerings if  Mrs. Bectors IPO:

Shares amounting To Rs 50 lakh were set aside for eligible workers, who will receive a Rs 15 per share discount. In consultation with the book running lead managers, the business and selling shareholders agreed on a minimum bid of 50 equity shares and many 50 shares afterward. The issue will open a day earlier on 14 December for anchor investors, while the three-day public issue will close on 17 December.

Valuation and recommendation for Mrs. Bectors IPO:

As of September 2020, the gross margins stand at ~48% which has constantly been improving from ~44% in 2018 and is set to further improve with the focus towards premiumization and product mix. Even though the volume driven by in-house consumption of packaged products might normalize, growth will be driven by QSR chains and cloud kitchens in Tier II & Tier III cities. 

The company, despite expanding, has also been able to reduce its working capital days to 25 days and maintain a healthy cash conversion cycle, with EBITDA to CFO (%) at 106.25% as of September 2020.

On the upper band, the offer is well priced at a ~21x on H1FY21 annualized EPS as compared with other listed peers like Britannia (~63x). We recommend a SUBSCRIBE rating on the offer as a long-term investment opportunity given the potential for growth in unpenetrated domestic markets focus on a premium product mix, healthy return ratios, and working capital.

About the Company:

In 1978, Mrs. Rajni Bector began an enterprise by cooking up remarkable ice creams, bread, and biscuits, unveiling her passion for baking. On the basis of consistency, freshness, and taste, Cremica started its journey. In due course of time, the small company became a large conglomerate, where the expectations of goodness remained the same. Operating from fully equipped factories with a total capacity of more than 1, 02,600 metric tonnes per year (Owned + Contractual), Cremica specializes in the manufacture of a range of biscuits and cookies. The production facilities of Cremica are equipped with new and highly effective technology. Our production facilities are equipped with sophisticated machinery and modern technology. They have imported advanced hybrid ovens for the baking process that provide uniform baking and minimize heat spots, ensuring that each batch of products is of uniform quality.


It is proposed that the equity shares offered should be listed on both the BSE and the Indian National Stock Exchange. The book running lead managers for the bid are SBI Capital Markets, ICICI Securities, and IIFL Securities.


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Source:- Moneycontrol