Rajni Bector has a fascinating story to tell, one rich with colour like the many hues in the foods and beverages that her eponymous company makes. It was a journey that began in Pakistan, led to a crossover into India during partition, saw the involvement of American giants McDonald’s, Quaker Oats, and Goldman Sachs, and on Thursday culminated in an initial public offering that has been subscribed 198 times, making it the most successful IPO in 2020.
Mrs Bector’s Food Specialities' Rs 541 crore IPO attracted interest from investors across the board and all of them — high net worth individuals, institutions and retail investors — oversubscribed their portions. This is perhaps not surprising given how the company, which began in a Ludhiana backyard in 1978 with an investment of a mere Rs 20,000, was transformed into a Rs 1,000 crore entity.
Such a long journey
Rajni Bector was born in Karachi in undivided India and spent her early childhood in Lahore, where her father was a government servant. After the partition, the family shifted to Delhi where she completed her primary education and joined Miranda House.
At age 17, Rajni married Dharamvir Bector from Ludhiana and then completed her studies. When her two children joined a boarding school in Mussoorie, she had a lot of free time and this was when the foundation for her future business was gradually laid.
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Bector had a passion for cooking so she enrolled in a baking course at Punjab Agricultural University. She invited people to try her ice cream, cakes, and cookies, and some of them suggested she start a business.
Taking their advice, Bector started making ice creams using a hand-churner and sold it at local fetes and funfairs. She ended up selling the items below cost and incurred losses, prompting Dharamvir to step in and tell her to look at it as a business.
And so, in the late 1970s, Bector set up a small ice-cream manufacturing unit in her backyard. A little later, with an initial investment of Rs 20,000, she began to take on large catering orders for biscuits, cookies and cakes for parties.
The big break
By the mid-1990s, other family members joined Cremica, as the company was known then. Their big break came in the mid-1990s, when Cremica was chosen by McDonald’s, which had just entered India, to supply it with buns and liquid condiments.
To this end, Cremica tied up with Quaker Oats in a joint venture, Quaker Cremica Foods, to produce ketchup, mayonnaise, milk shake syrups and other liquid condiments, mainly for McDonald’s business in India and neighbouring countries.
Since 1996, Mrs Bectors Food Specialities has been supplying buns, ketchup and toppings to McDonald’s. The company also counts Cadbury's and ITC among its business partners, with its factory in Phillaur, Punjab, making biscuits sold by Cadbury’s and ITC’s Sunfeast.
In 1999, Quaker Oats, Cremica’s partner in producing liquid condiments, withdrew from the joint venture. The name of the company was then changed to Mrs Bector Food Specialities (P).
But business continued as usual and by 2006, Bector Food Specialities was clocking revenues of Rs 100 crore, at 30 percent year-on-year growth.
That year, global investment banking firm Goldman Sachs, through its Mauritius-based unit Jade Dragon, picked up a 10 percent stake in the company for 50 crore, which valued the company at 500 crore.
The funds were used to expand the business and develop modern, fully automated plants in Greater Noida, Mumbai and Himachal Pradesh.
In 2010, Goldman Sachs exited, selling its share to Motilal Oswal.
Next generation takes charge
In 2013, the business was divided equally among Rajni Bector’s three sons: Ajay, Anoop and Akshay Bector. The biscuits and bakery business, which contributed 65 percent of the total revenue, would be managed by Ajay and Anoop. It was demerged from the condiments business, which would be managed by Akshay.
Today, Mrs Bector’s Food Specialities Ltd, which closed its IPO on Thursday, is primarily the biscuits and bakery division.
Meanwhile, the condiments business, known as Cremica Food Industries, is going national in the retail space by venturing into the high-margin kettle chips segment.
A Rs 1,000 crore company
According to an IPO report from Anand Rathi, the company’s revenues from operations have increased from Rs 693 crore in FY18 to Rs 762 crore in FY20 and it is today almost a Rs 1,000 crore company.
Today, Mrs Bector Food Specialities is one of the leading companies in the premium and mid-premium biscuits and bakery segment in North India.
The company exports its products to 60 countries and manufactures and markets a range of biscuits such as cookies, creams, crackers, digestives, and glucose under its flagship brand ‘Mrs Bector's Cremica’.
It also manufactures and markets bakery products in the savoury and sweet categories, including breads, buns, pizza bases and cakes under the brand ‘English Oven’.
Mrs Bector Food Specialities today employs over 4,000 people across six in-house manufacturing facilities in Phillaur and Rajpura, Tahliwal, Greater Noida, Khopoli, and Bengaluru.
As for Mrs Bector, while less involved with the business side of things, she is very much in the thick of things at the ground level, especially when it comes to new recipes.