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Bectors Food Specialties Ltd is coming up with a Rs. 540.5 Cr IPO by Ms. Nirali Shah, Senior Research Analyst, Samco Securities

Mrs. Bectors Food Specialties Ltd is coming up with a Rs. 540.5 Cr IPO. Being a flagship brand ‘Mrs.Bector’s Cremica’ is one of the leading biscuit brands in the premium and mid-premium segments across North India with a market share of 4.5% and its Bakery products brand ‘English Oven’ is also one of the largest selling brands in Tier-I & II cities with a market share of 5% in the branded breads segments in India. The Company caters to well renowned brands such as PVR, Burger King, McDonalds in India and has a budding exports business contributing to 22% of its revenues. Financially too, this company has shown strong revenue CAGR of 12% compared to a 10% CAGR by Britannia in FY17-19. Its free cashflows have improved from the previous year and its debt to equity ratio has also been on a decline despite the pandemic. Mrs. Bectors trades at a lower valuation multiple of 53.9x-54.2x P/E compared to its peer Britannia which is trading at a 62.3x P/E which makes it a good bet from a subscription standpoint. However, a number of risks such as stiff competition, higher dependency on the north Indian market for growth and a premium category target market which might not appeal to the rural and semi-urban areas makes Mrs. Bectors a prime candidate solely for listing gains.