Mrs. Bectors Food Specialities rallies 10%; stock surges 30% over QIP price: Mrs. Bectors Food Specialities share
Source: Business Standard
The stock of the fast moving consumer goods company that majorly manufactures biscuits has surged 30 per cent over its qualified institutional placement (QIP) price of Rs 1,550 per share. Meanwhile, in the past five weeks, the stock has zoomed 50 per cent.
The company has raised Rs 400 crore via a QIP issue. The company allotted shares to the Government of Singapore, SBI Multipcap Fund, Axis Mutual Fund, The Prudential Assurance Company and Arisaig Asia Fund, among others.
The company proposed to utilise the net proceeds from the fundraise for “repayment and/or pre-payment, in full or in part, of certain outstanding borrowings availed by the company; investment in the company’s subsidiary, Bakebest Foods Private Limited for financing the project cost towards expansion of the facility at Khopoli, Maharashtra (Khopoli Expansion Project); financing the project cost towards setting up a new facility at Dhar, Madhya Pradesh (Madhya Pradesh Project); and general corporate purposes.”
The company is a supplier of buns in India to reputed quick service restaurant (QSR) chains such as Hardcastle Restaurants and Yum! Restaurants (India), among others.
The operating margin is expected to sustain at 14-15 per cent over the medium-term, supported by various cost rationalisation initiatives and gradual absorption of fixed costs with improved utilisation of incremental capacity, said CRISIL Ratings.
According to the rating agency, the business risk profile of the company is expected to improve in the near- to medium-term, with sustenance of healthy margins, strong brand presence in biscuit and bakery segments, improving geographical diversity and established relationship with large institutional clients.
Fuelled by structural demand factors, the market has expanded during the past three years at a CAGR of 8.2 per cent.
Bread products, such as buns, pizza bases and loaves, account for Rs 5,700 crore of the remaining 10 per cent of the market, the company said in its FY24 annual report.
Small bakery businesses, cottage industries and household-style manufacturing facilities dominate the non-branded biscuit market, the company said.
First Published: Sep 12 2024 | 12:24 PM IST
