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Bikaji Foods: Share of Bikaji Foods rose 33% in 15 days, what should investors do now?

Bikaji Foods share price: The stock price of ethnic snacks food company Bikaji Foods continues to rise since its listing. Since its market debut on November 16, the stock has gained 33 per cent to reach Rs 436, as against its listing price of Rs 322.80. The stock has gained 10 per cent in the first two sessions of this week. At 1.40 pm, the stock gained 0.28 percent and is trading at Rs 435.30.

IPO got good response

The IPO of Bikaji Foods was open between November 3-7. The price band of Rs 285-300 and lots of 50 shares were fixed for this issue. There was a discount of Rs 15 for the employees. The issue received an overwhelming response from investors and was subscribed 26.67 times overall. The reserve portion was subscribed 80.63 times for qualified institutional buyers (QIBs), 7.10 times for non-institutional investors, 4.38 times for personnel and 4.77 times for retail investors.

Bikaji Foods is India's third largest ethnic snacks company with international presence. Also, it is the second fastest growing company in the snacks market.

What do experts say?

“The company has a strong distribution network for its products as well as strong sales teams to ensure market service,” said Mohit Nigam, Fund Manager and Head (PMS), Hem Securities.

However, analysts are divided on it due to the expensive valuations. At the current market price, the trailing twelve month (TTM) ie trailing 12 months price to earnings ratio is more than 100 times. Thus the stock is quite expensive as compared to its peers like Nestle India and Britannia Industries.

According to Geojit Financial Services, the biggest risk is its reliance on bhujia and namkeen, which account for about 70 per cent of total sales. Apart from this, its main markets are Rajasthan, Assam and Bihar, from where it gets 70 percent of its total sales. This is also a big risk.

Disclaimer: The views and investment advice expressed here are the personal views and opinions of investment experts. StockPro advises users to consult certified experts before making any investment decisions.

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