'Mahashay' Dharampal Gulati (File image: MDH website)
The week that went by witnessed a mix of both good and bad news within the Fast Moving Consumer Goods (FMCG) space.
Among the good news, the initial public offering of Burger King, one of the fastest-growing quick-service restaurant chains in India with 268 outlets turned out to be the third issue in the calendar year 2020 to cross the subscription mark of 150 times. The IPO was open from Dec 2-4.
Burger King IPO
At 156.6 times, Burger King has received the second-highest subscription in the current year after Mazagon Dock Shipbuilders.
Burger King India targets to open 700 restaurants by December 2026. The Rs 810-crore IPO was subscribed 156.6 times overall during December 2-4 as it received bids for 1,166 crore equity shares against an offer size of 7.44 crore equity shares (excluding anchor book portion).
The strong interest in the issue was owing to attractive valuations, strong brand positioning, healthy financial prospects, expected robust store expansion plans of the quick-service restaurant industry in India. The state-owned defence company, Mazagon Dock Shipbuilders' Rs 443-crore IPO had seen the highest subscription in 2020 at 157.4 times. The issue opened during September 29-October 1.
The third IPO that received a strong subscription was Happiest Minds Technologies, the digital transformation IT consulting & services company founded by Ashok Soota in 2011. The 700-crore public issue witnessed 150.98 times subscription during September 7-9.
Burger King was the fourteenth IPO this year and more than Rs 30,000 crore has been raised by fourteen companies through IPOs.
Honey Adulteration Controversy
Within not so good news in the FMCG industry was the honey adulteration controversy that surfaced last week.
A new study by the Centre for Science and Environment (CSE), indicated that honey, which is a natural product from bees, is mixed with sugar syrup acquired from rice, corn, beetroot, and sugarcane and sold as pure honey.
The CSE food researchers took 13 bigger and smaller brands of processed and raw honey that are sold in India to check their purity.
The study found that 77 percent of the honey samples were adulterated with sugar syrup. Only 3 out of the 13 brands Marico’s Saffola, MarkfedSohna and Nature's Nectar (one out of two samples) -- passed all the tests.
Brands that failed the purity test for honey include Dabur, Patanjali, Baidyanath, Zandu, Hitkari and Apis Himalaya.
Dabur and Patanjali have refuted the findings of a a study that said the honey sold by the companies is adulterated with sugar syrup. The companies said they have fully adhered to the norms on testing honey set by the Food Safety and Standards Authority of India (FSSAI).
Emami which sells honey under the brand Zandu said that its Zandu Pure Honey conforms and adheres to all the protocols and quality norms/standards laid down by the Government of India and its authorised entities such as FSSAI.
Lost A Legend
Mahashay Dharampal Gulati, the owner, and face of masala brand MDH Spices passed away on December 3. He was 97 years old.
Gulati was undergoing treatment at a hospital in New Delhi where he suffered a cardiac arrest on December 3 morning.
Gulati was born in Sialkot in undivided India on March 27, 1923 and later migrated to India after the partition. He dropped out of school and set up a small business in 1937 with the help of his father Mahashay Chunni Lal Gulati, before joining the family business of spices.
Often referred to as the 'King of Spices', Gulati appeared in several advertisements of MDH products. But he was also known for his work towards improving the quality of education and was associated with a number of educational institutions. In 2019, he was awarded the Padma Bhushan, India's third-highest civilian award.