Bikaji Foods IPO: We will grow at 20 per cent CAGR for next 3-4 years, says BFI MD Deepak Agarwal

Bikaji Foods IPO Listing: Bikaji Foods International (BFI) Ltd's Managing Director Deepak Agarwal shared company's expectations for the future and details regarding the Initial Public Offering (IPO) listing in an exclusive in-depth conversation with Zee Business Managing Editor, Anil Singhvi.

During the exclusive interview Deepak Agarwal said that Bikaji Foods expects to grow at 20 per cent CAGR for the next 3-4 years, and added, “Last 5-6 years the company has been growing at 20 per cent CAGR and we expect it to continue for the next 3-4 years.” 

Speaking further about the manufacturing units, Agarwal said that Bikaji Foods is planning to be in the top five list of the focus market’s states. “In the next 1-3 years, the company is focusing on certain markets like Uttar Pradesh, Karnataka, and states near Rajasthan like Punjab, Haryana, Delhi and NCR. We are planning to be in the top five list in these states and will increase the share per cent in the existing market,” he avered. 

Agarwal had an in- depth conversation regarding the company’s capital expenditure and shared that in 4-5 years the capex will be Rs 4,400- 4,500 crore. “Last year, government has sanctioned Production Linked Incentive Scheme (PLI) where we committed to invest Rs 430 crore and with aggressively planning we initiated manufacturing units in Assam, Bihar, Kanpur and South India. There are two upcoming units– one frozen fruit factory and another in Patna, and we are also planning to set-up in Raipur. These units will be set-up in a year and then we will have a nominal capex, where Rs 40-50 crore will be for new product development and maintenance. In this year, we are yet to do a capex of Rs 100 crore. After this, we don’t need to do any bigger capex. With this capex, after 4-5 years of utilisation we can achieve 4,400-4,500 crore capex,” Agarwal said. 

He further added that in future there will be more Contract Manufacturing units and the company is expecting a double-digit Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the next few years.

Talking about the food inflation hedging, Agarwal said, “We follow the commodity market, and do not hedge as farmers sell commodities every day. Our traders have limited stocks. Also, government policies affect things. So, if rates increase at a greater rate, we pass on to the market and this takes 30-40 days.” 

Bikaji foods’ MD said that they have provided investors with dividends and will continue to do so, but have not formed any policy as of now. 

Bikaji Foods Ltd today got listed at Rs 322.8 which was a premium of 6.7 per cent. The issue price was Rs 300 and the IPO was subscribed 26.67 times.

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