Bikaji Foods is planning an IPO to raise Rs. 1,000 crore at a $1 billion value

Bikaji Foods International, India’s biggest maker of ethnic savories and sweets, is expected to submit its draught red herring prospectus this week in order to raise $1 billion in an initial public offering. IIFL Securities, JM Financial and Intensive have been designated as the issue’s bankers by the Rajasthan-based ready-to-eat goods manufacturer. The plan might mostly consist of current shareholders making an offer for sale.

IIFL, Lighthouse Funds, Avendus, and Axis are among the private equity firms that have invested in Bikaji. Lighthouse bought a 12 percent share in the firm in 2012 and sold a portion of it to enable IIFL to invest in Bikaji.

What’s on the menu

According to the company’s FY20 annual report, Avendus and Axis each acquired a 1% interest in 2019. This private equity investment aided the company’s debt-free status.

Bikaji has six production plants in Assam, Rajasthan and Karnataka that produce over 400 tonnes of snacks every day. It produces over 300 different items, including namkeen, bhujia, sweets, papad, and frozen meals. Between FY16 and FY20, Bikaji’s sales volume increased 13.85 percent yearly to 74.7 million kg, while revenue increased 14.2 percent to Rs 1,073 crore.

Namkeen accounted for 37% of sales, followed by 32% for Bhujia, 14% for sweets, 10% for papad, and the remainder for miscellaneous items. According to reports, the Indian RTE snack industry is predicted to increase at a compound annual growth rate of 8.9% between 2021 and 2025.

Extended shelf life, easy availability, greater urbanization, and rising disposable incomes all contribute to the expansion of RTE snacks. According to the firm’s website, the company wants to construct additional facilities in key areas in the next few years and introduce new brands across all categories. At the conclusion of FY20, promoters Deepak Agarwal and Shiv Ratan Agarwal owned 78.8% of the company.

Bikaji Foods

Shiv Ratan Agarwal founded the food company, which was formerly known as Shivdeep Industries Ltd. It began as a partnership in 1986 before converting to a limited liability corporation in 1995.

Until 1993, when it broke ties with Nagpur-based Haldiram Foods International Pvt. Ltd and adopted the Bikaji brand name, the firm sold its goods under the Haldiram’s name. Bikaji’s factory in Bikaner produces Indian snacks including papad, bhujia, namkeens, and sweets like rasgulla.

According to a June 2017 study by credit rating agency ICRA, the business works in a fragmented and unorganized food market, where it competes with both local producers and organized competitors. Aside from Rajasthan, the corporation has a substantial presence in a few other states, including Assam and Bihar.

According to the ICRA report, in the financial year 2013-14, the business initiated an expansion programme that required Rs 280 crore in capital expenditure. According to the ICRA report, the expansion plan will be finished by the end of March, bringing the company’s total installed capacity to 277 tonnes per day.

Lighthouse

Consumer goods, personal care, lifestyle, food & beverage, agriculture, construction materials, healthcare, and financial services are among the industries in which the private equity company invests in India. Mukund Krishnaswami, a former official at Lehman Brothers’ private equity branch, and William Sean Sovak founded the US-based private equity company in 2001. Since 2006, it has been investing in India.

The private equity company is raising $200 million for Lighthouse India Fund III Ltd, its third fund. The International Finance Corporation and its asset management arm announced a $45 million investment in Lighthouse’s third fund in December. Lighthouse’s most recent departure occurred in February 2017, when it sold its Unibic Foods interest to Peepul Capital.

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