Financial Insights

Bikaji Foods to launch its IPO with a valuation of $1 billion

Bikaji Foods International, India’s largest manufacturer for sweet and savoury Indian ethnic Ready-To-Eat (RTE) items, is likely to file its Draft Red Herring Prospectus (DRHP) by the end of this week to launch its IPO this year to raise nearly Rs 1,000 crores at a valuation of $1 billion.

The company was established in 1986 in Rajasthan as a partnership and it started exporting products in 1994. Today the company has 6 manufacturing facilities that make more than 400 tonnes of snacks per day. It makes nearly 300 products ranging from bhujia, sweets, namkeen, papad and frozen foods. The sales of the company grew 14.2% to Rs 1,073 crores from FY2016 to FY2020. Its sales volume grew 13.85% annually to 74.7 million in the same time frame. The Indian RTE snacks market is set to grow at a CAGR of 8.9% by 2025 due to its longer shelf life, easy availability and increasing disposable incomes.

It is suspected that the issue will involve an Offer-For-Sale for existing investors. Several big names like Lighthouse and Avendus have invested in Bikaji. In 2012, Lighthouse acquired 12% stake in company and later on reduced its holding to allow IIFL to invest in it. Moreover, Avendus and Axis have acquired 1% in each in 2019 which made the company debt free. Both promoters Shri Shiv Ratan Agarwal and Deepak Agarwal currently hold 78.8% in the company.

The company has appointed JM Financial and IIFL Securities as bankers for the issue.

Highlight by Aman Agarwal.

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