The stock price of Bikaji Foods, a national snack food company, has been rising since its listing. Since its listing on November 16, the stock has rallied more than 33% to Rs 436 from its listing price of Rs 322.80.

While the stock was flat on the morning of November 30, it has gained 10% in two consecutive sessions over the past week. The stock was quoted at Rs 436 per share on the National Stock Exchange, up 0.3% at 11:08 am.

The Rs 881 crore initial public offering (IPO) was 26.67 times subscribed between November 3-7, backed by qualified institutional buyers. QIBs subscribed more than 80 times, and high-net-worth individuals subscribed more than seven times. Retail investors and employees reserved part subscribed 4.77 times and 4.38 times, respectively.

Bikaji Foods is the third-largest ethnic snack company in India with international reach and the second fastest-growing company in the organized snack market.

Analysts were mixed, however, due to the expensive valuation. It trades more than 100 times trailing 12-month (TTM) earnings at current market prices. This makes it more expensive than its larger peers, such as Nestle India and Britannia Industries.

On the technical front, Choice Broking’s Om Mehra said investors should wait for fresh entries around Rs 320-350. In its red herring prospectus, the company warned that delays or defaults could impact its profits and EBITDA margins in payments from super stockists.

As a result, the company faces delinquent payments and may continue to have high outstanding receivables. As on June 30, 2022, the company has accounts receivable of Rs 70 crore.

Its ROCE fell from 20.88% in FY22 to 13.89% in FY22 as rising raw material prices could not be fully passed on to customers. For Geojit Financial Services, a major risk is the company’s reliance on sales of Bhujia and Namkeen products, which account for approximately 70% of sales.