Mrs Bectors IPO subscribed 197 times on final day of bidding; grey market premium soars further

Mrs Bectors Food Specialities’ IPO was subscribed a massive 197.36 times by investors at the time of closing bell on Thursday. The three day bidding process came to a close with all categories of investors oversubscribing their portion of the issue. Non-institutional Investors showed the most interest in Mrs Bectors, subscribing 621 times. With this Mrs Bectors has out-done the subscription rate of Burger King — the youngest stock to debut on Dalal Street. Burger King — one of the most profitable listings on the bourses this year —  was subscribed 156 times by investors. 

Qualified Institutional Buyers (QIB) have bid for their portion 175 times. Retail investors bid for 28 times and employees of the firm oversubscribed the issue 43.77 times. Non-institutional investors were the most aggressive bidders for the issue. The Rs 540 crore issue of Mrs Bectors offers 1.32 crore shares but bids have so far been received for 250 crore shares.

In the unlisted space, shares of Mrs Bectors Food have gained further and are trading at 80% premium. “Although volatile but Mrs Bectors Food is trading at a grey market premium of Rs 225-230 in the grey market,” Manan Doshi, Cofounder of UnlistedArena.com a firm dealing in unlisted & pre-IPO shares told Financial Express Online.

Analysts had been expecting high subscription figures for Mrs Bectors after the success of Burger King IPO earlier this week. “Company (Mrs Bectors) results were better than the industry in the first half of the fiscal 2021. Peers such as Britannia Industries, Nestle India, Prataap Snacks and DFM Foods are trading at trailing PE of 50.2, 85.6, 57.1 and 97.6 respectively,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking. The IPO, priced at Rs 286-288 per share is at a trailing PE of 27.9. “Given the significant discount compared to listed peers there is comfort on the valuation. We are positive on the long term growth prospects of the industry and the company, and hence recommended to “Subscribe” to the issue for long term as well as for listing gains,” he added.

Mrs Bectors Food is the largest supplier of buns in India to quick service restaurants (QSR) chains such as Burger King, McDonald’s, KFC, Carl’s Jr, Pizza Hut and Dominos Pizza. Investors are now rallying behind Mrs Bectors to replicate the gains of Burger King. The QSR industry major debut on the bourses at a 92% premium and helped investors pocket over 3 times returns in the initial days of trading.