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Business Overview

* Company is second-fastest growing company in the organised snacks market in India, providing Indian snacks and sweets, and is the thirdlargest ethnic foods company in the country with a global presence.

* The company has an international footprint. In the six months ended June 30, 2022, The company has exported the products to 21 international countries, including North America, Europe, the Middle East, Africa, and Asia Pacific, representing 3.20% of sales of food products.

* They are the largest manufacturer of Bikaneri bhujia with annual production of 29,380 tonnes, and second largest manufacturer of handmade papad with an annual production capacity of 9,000 tonnes.

* Company is third largest player in the organised sweets market with annual capacity of 24,000 tonnes in fiscal 2022.

* Company product range is divided into six main categories: bhujia, namkeen, packaged sweets, papad, western snacks, and other snacks, mainly gift packs, frozen food, mathri range, and cookies.

* They sold more than 300 products under bikaji brand.

* Amongst competitors, company is the market leader in the family pack segment with 60.57% share of business coming from SKUs.

* The company has over the years established market leadership in the core states of Rajasthan, Assam and Bihar with an extensive reach.

* Company has 6 depots, 38 super stockists, 416 direct and 1,956 indirect distributors that work with super stockists, located across 23 states and four union territories in India.

* Company has 7 operational manufacturing facilities, with 4 located in Bikaner, 1 in Guwahati, 1 facility in Tumakuru (Karnataka).

* Amitabh Bachchan, a well-known celebrity in India, is the brand ambassador of company.

* Company has recently launched Bikaji Café and Bikaji Funkeen brands to promote their western snack segment.

What is working for company

* Company sell all of their products under well-established Bikaji brand. concentrating on a wide choice of high-quality items, ethnic Indian cuisine that is truly authentic, creative packaging, and efficient pricing tactics that address all major price points.

* Diversified product portfolio focused on various consumer segments and markets diversified product portfolio included more than 300 products across all product segments. company has launched packages of various sizes for their products.

* Strategically located manufacturing facilities with stringent quality standards stringent quality control across the entire production chain, including sourcing, processing, manufacturing, packaging and distribution. The raw ingredients used in products are of premium quality also locations of existing and proposed manufacturing facilities across India, including the proposed contract manufacturing facilities are:

* Company has large Pan-India distribution network. As of June 30, 2022, company had six depots, 38 super stockists, 416 direct and 1,956 indirect distributors that work with super stockists, located across 23 states and four union territories in India.

* Company is also focused on developing strategic distribution channels, such as sale of products at railway stations across India. Further, they also started supplying products for sale in Indian army canteens from August 2022.

* Experienced promoter and management Team Promoter, Shiv Ratan Agarwal has more than three decades of experience in this industry. Company is supported by 2,664 committed staff base on payroll out of which 474 are employees and 2,190 are skilled and unskilled labours. Also attrition rate of company decreases compares to previous years.

What is not working for company?

* Company is significantly dependent on the sale of bhujia products and sale of family pack stock keeping units for their revenue change in consumer taste and preferences may affect the revenue of company.

* Company currently operate under a single brand wherein they sell a variety of products. Their competitiveness is dependent on their ability to develop new products and more efficient manufacturing capabilities and Company is not giving assurance for achieving commercial success of new products in future.

* Termination of agreements in relation to the contract manufacturing facilities may adversely affect the business.

* Company derive a significant portion of revenues from core markets of Rajasthan, Assam and Bihar. Any adverse developments in these regions could have an adverse impact on business.

* Portion of company revenue is dependent on export any decline in export may adversely affect the company.

* Company, Subsidiaries, Promoters, Directors and Group Companies are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on business financial conditions.

Our Recommendation

We recommend you to SUBSCRIBE to this IPO on the following parameters:

* Company sell all of their products under well-established Bikaji brand.

* Diversified product portfolio focused on various consumer segments and markets.

* Strategically located manufacturing facilities with stringent quality standards.

* Extensive distribution network in India.

* large Pan-Indian and international distribution networks, agreements with reputable retail chains, and expanding e-Commerce and exports channels.

* Experienced promoter and management Team.

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SEBI Registration No.: INZ000198735, Research Analyst: INH000006448, PMS: INP000006785
 

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