Impressive debut for Mrs. Bectors Foods – What next?

What’s next for Mrs. Bectors Foods after closing an impressive 107% higher on its debut? Mrs. Bectors Foods opened on December 24th at ₹500, up almost 74% from its IPO offer price of ₹288. The stock closed at ₹594.2 after hitting a low of ₹552.8 and a high of ₹596 during intraday trade.

Listing gains

The IPO was oversubscribed by a whopping 198.02 times making it the most oversubscribed IPO of the year, beating Mazagon Dock Shipbuilders Limited and Burger King in the process. An investment of ₹14,400, one lot of 50 shares, made on December 15th would be worth ₹29,700 on December 24th. Not bad for 10 days’ work!

The road ahead for Mrs. Bectors Foods

Mrs. Bectors has a very strong business model, primarily catering its services of manufacturing breads and biscuits. Another strong competitor in this sector would be Britannia and Parle. The stark difference between these companies would be that Britannia and Parle have managed to build a very strong brand in the past decade and is more B2C oriented while Mrs. Bectors Foods has not concentrated too much on building their brand and has instead chosen to focus more on the B2B segment.

Recently we have witnessed several bumper listings of IPOs including Burger King and Mazagon Dock Shipbuilder Limited.

Despite sound fundamentals, the valuation of Mrs. Bectors Foods is on the higher side for a company in the FMCG segment. The price is bound to drop a bit after the initial euphoria, as seen in the case of Burger King, and provide more reasonable entry points for those who were not lucky enough to be allotted the IPO.

The verdict

If one has been lucky enough to be allotted shares of Mrs. Bectors Foods, it would be wise to exit with the listing gains and wait for a quarter or two before considering to include this stock in their portfolio again.

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