Bikaji Foods International, the country's largest fast-moving consumer goods (FMCG) brands with an international footprint as per the Frost and Sullivan report quoted in it DRHP has filed its draft red herring prospectus (DRHP) for an initial public offering (IPO).
The snack-maker is backed by marquee investors like Avendus, Axis Asset Management, Lighthouse Funds, IIFL Asset Management and Intensive Softshare.
As per market sources it is understood that they are likely to raise around Rs 1,000 crore.
The issue with a face value of Re 1 per equity share is an entirely an offer for sale (OFS) up to 29,373,984 by existing shareholders and promoter group entities, according to the draft red herring prospectus (DRHP). The company will not receive any proceeds from the issue.
The offer of sale comprises up to 2,500,000 equity shares by Shiv Ratan Agarwal, up to 2,500,000 equity shares by Deepak Agarwal ("The Promoter Selling Shareholders"), up to 12,110,967 equity shares by India 2020 Maharaja Limited, up to 50,000 equity shares by Intensive Softshare Private Limited, up to 3,110,056 equity shares by IIFL Special Opportunities Fund, up to 1,995,552 equity shares by IIFL Special Opportunities Fund-Series 2, up to 976,179 equity shares by IIFL Special Opportunities Fund-Series 3, up to 2,753,339 equity shares by IIFL Special Opportunities Fund-Series 4 and up to 2,162,226 equity shares by IIFL Special Opportunities Fund-Series 5 ("IIFL Funds"), up to 1,215,665 equity shares by Avendus Future Leaders Fund I (The "Investor Selling Shareholders").
The offer also includes a reservation for subscription by eligible employees.
With thorough awareness of Indian tastes and preferences, Mr. Shiv Ratan Agarwal launched the Bikaji brand in 1993 and has established market leadership and reach in the ethnic snacks market in Rajasthan, Assam, and Bihar. Bikaji has gradually expanded its footprint across India, with operations in 22 states and three union territories as of September 30, 2021 and also exporting its products to 35 international countries, including North America, Europe, the Middle East, Africa, and Asia Pacific, accounting for 4.60 percent of its food product sales.
Bikaji today stands to be the largest producer of Bikaneri bhujia with annual production of 26,690 tonnes, and the second largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes in Fiscal 2021 as mentioned in the F&S report quoted in its DRHP. It is also one of India's major producers of packaged sweets, including rasgulla, gulab jamun, and soan papdi and is known to be a pioneer in developing and reinventing classic Indian snacks with a contemporary taste to meet changing customer demands in India and abroad.
Bhujia, namkeen, packaged sweets, papad, western snacks, and other snacks, which principally include gift packs (assortment), frozen food, mathri range, and cookies, are among the company's six main product categories. It has recently launched Bikaji Café and Bikaji Funkeen brands to promote its western snack segment and has also launched an online retail platform via its website in February 2020 besides a mobile applicable application in June 2020 which allow consumers to browse our selection of products.
The company's six operating manufacturing facilities, four of which are located in Bikaner (Rajasthan), Guwahati (Assam), and Tumakuru (Karnataka), a contract manufacturing unit in Kolkata (West Bengal) that serves nonexclusively parts of eastern and north eastern India and a small facility in Mumbai catering to restaurant sales.
The company intends to establish and operationalise five more manufacturing facilities, one in Rajasthan catering to frozen snacks and sweet products owned and operated by them besides others across Rajasthan, Bihar, and Uttar Pradesh, where it will produce namkeen and western snacks.
Bikaji's revenue from operations grew 21.98% to Rs. 1310.75 crore for the fiscal 2021 against Rs. 1074.55 crore for the fiscal 2020, primarily due to increase in volume and realisation of products, in particular, bhujia, namkeen, papad, western snacks and packaged sweets and sale of food products (traded goods), while its net profits grew 60.26% from Rs. 56.37 crore in FY20 to Rs. 90.34 crore in FY21. For the six months ending September 2021, revenue from operations stood at Rs 771.73 crore and net profit was Rs 40.93 crore.
The Indian Savoury Snacks market is worth Rs 72,800 crore in 2021 and is expected to grow at a CAGR of 13% to Rs 1,18,600 crore by 2025. The packaged food industry in India is currently valued at Rs 3,61,500 crore, and it has developed tremendously as a result of changing lifestyles, increased income, and urbanisation. The packaged food retail income was valued at Rs 2,43,400 crore in Fiscal 2015, and it has grown at a CAGR of about 10.40 percent to Fiscal 2020, with a CAGR of 11.50 percent expected over the next five years to reach Rs 5,58,100 crore.
JM Financial Limited, Axis Capital Limited, IIFL Securities Limited, Intensive Fiscal Services Private Limited and Kotak Mahindra Capital Company Ltd are the book running lead managers to the issue.