Bikaji Foods Acquires 49% Stake In Bhujialalji; Shares Hit Record High
The firm bought 9,608 shares and 396 compulsorily convertible debentures of Bhujialalji at Rs 5,100 apiece for total Rs 5.1 crore.
Shares of Bikaji Foods International Ltd. hit an all-time high on Wednesday after it acquired a 49% stake in packaged-snacks producer Bhujialalji Pvt.
The ethnic snacks firm bought 9,608 equity shares and 396 compulsorily convertible debentures of Bhujialalji at Rs 5,100 per security, aggregating to a total of Rs 5.1 crore, according to an exchange filing.
"With the company strategically headquartered in Bikaner (Rajasthan), this acquisition will help us leverage their learnings to enable accelerated growth and expand our horizons when it comes to a new audience set," Deepak Agarwal, managing director of Bikaji Foods, said. "We are confident that there is no fear of brand cannibalisation."
The deal comes at a time when India's organised snacktionary business is currently valued at Rs 4.24 lakh crore. The industry has grown significantly in the last five years due to changing lifestyles, rising incomes, and urbanisation. It is estimated to grow at a compound annual growth rate of 8% in the next five years, according to a report by analytics firm Frost & Sullivan.
Shares of Bikaji Foods rose as much as 10% intra-day to trade at a record high of Rs 468.90. The stock pared gains to trade 6.67% higher at Rs 454.75 apiece as of 12:59 p.m., compared to a 0.18% advance in the NSE Nifty 50.
The total traded volume stood at 7.1 times its 30-day average. The relative strength index was at 71.55, implying that the stock maybe overbought.
All four analysts tracking the company maintain a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 2%.
