Bikanervala to go for IPO in next three years

Indian sweet, snack, and restaurant chain group Bikanervala, with revenues of over Rs 3,000 crore, is working towards an initial public offering (IPO) for its food company in the next three years.

Before that, it could also bring in private equity (PE) investors.

The low-profile Aggarwal family-owned group company, Bikanervala Foods (which also sells under the brand name Bikano), operates in the snack business.

They are aiming to achieve revenues of over Rs 10,000 crore by 2030 and are already making substantial investments in new plants for manufacturing Indian snacks.

Additionally, they have recently entered the branded spice market, taking on rivals such as ITC, Hindustan Unilever, and home-grown brands like MDH.

They are also planning to enter the dairy market, with a detailed plan being worked out.

Speaking to Business Standard, Shyam Sunder Aggarwal, the 70-plus-year-old managing director of Bikanervala Foods who transformed the brand into a pan-Indian food giant, says, “We want to grow the food business by 20 per cent every year and will look for an IPO for that company after three years.

"We may involve PE funds and other partners to foster business growth before that.

"Our goal is to achieve revenues of Rs 10,000 crore in 2030 and Rs 1,800 crore in the food sector in 2023-24, up from Rs 1,500 crore in 2022-23 (FY23).”

Their quick-service restaurant business boasts over 165 outlets, including 30 located globally in places such as the US (New York and Los Angeles), Canada, and Singapore.

Shyam Sunder’s target is to establish a chain of 600 stores by 2030.

He also highlights that earnings before interest, tax, depreciation, and amortisation (Ebitda) margins in the food business stand at around 10 per cent, in line with industry norms.

“We have recently entered the branded spice business, as we already produce our spices for captive consumption in packaged foods.

"We are exploring the dairy sector due to our significant milk consumption for sweet-making,” adds Shyam Sunder.

The company is making substantial investments in capacity expansion, including setting up a Rs 400 crore plant near Jewar Airport to manufacture and package snack foods.

This move is expected to double the existing capacity from 200 tonnes per day to 400 tonnes.

Also, an investment of Rs 50 crore is being made to establish another plant in Hyderabad, catering to the South India and Western India markets.

According to IMARC, the Indian packaged snack and sweet market touched Rs 44,000 crore in 2022 and is projected to nearly double to Rs 86,000 crore by 2028, with the bulk coming from snacks.

Bikanervala will not be the first company in the Indian snack and sweet business to consider an IPO.

In November 2022, Bikaji Foods International, led by Shiv Ratan Aggarwal (who split from the Haldiram family), went public with the Bikaji brand name and received a positive response.

Earlier, it had secured investments from PE firms like Lighthouse and IIFL.

Bikaji Foods International declared revenues of Rs 1,966 crore, with a year-on-year value growth of over 22 per cent and a profit after tax of Rs 126.5 crore in FY23.

Ebitda margins stood at approximately 13.4 per cent.

The remaining Haldiram family, divided into regions, is also reportedly considering merging their businesses and subsequently pursuing an IPO within a year.

Shiv Krishna Aggarwal, heading Haldiram Snacks based in Nagpur, oversees the West and South India markets.

Delhi-based Haldiram Foods International, managed by two brothers, Manohar and Madhusudan Aggarwal, also contributes to this combined revenue, which is estimated to have exceeded Rs 9,000 crore in 2021-22.