Case Folio
Bectors Food: From a Backyard Enterprise to the Most Successful IPO of 2020

Article Details
Pub. Date : June' 2021
Product Name : The IUP Journal of Case Folio
Product Type : Article
Product Code : IJCF50621
Author Name : Jitesh Nair and Ramakrishna Sadhu
Availability : YES
Subject/Domain : Management
Download Format : PDF Format
No. of Pages : 17



The case describes how Rajni Bector (Rajni) converted her hobby and passion for ice cream making, baking, and cooking into a commercial success. What began as a backyard enterprise in 1978 grew over the years into a multi-million-dollar family business with a successful IPO in 2020. The case begins with a brief background of Rajni and her early entrepreneurial journey on how she started her own venture and managed it on her own for a decade with support from her husband. The case then focuses on the growth phase of the business beginning with Rajni's three sons joining the business and the subsequent partnership with McDonald's that laid the foundation for its longterm growth and development and helped Bectors Food become the largest supplier of breading, bakery items and liquid condiments to major institutional clients all over India. The case then describes the various steps the company took to create value for the investors and promoters, including seeking private equity participation followed by a restructuring exercise that resulted in the business being split among family members with separate ownership and companies for biscuits, bakery items and liquid condiments. The case also touches upon how the company sought to generate higher growth and wealth creation for the founders and investors by expanding its manufacturing facilities, introducing new products, and focusing on the retail consumer space as well as the exports route. Subsequently, the case touches upon the need for the company to create a well-established distribution network for greater market penetration and to improve brand recall through customer outreach programs. The case ends with a focus on Bectors Food's successful Initial Public Of fering (IPO) in December 2020 and its future strategies to improve market share and compete with major brands in the biscuits segment as well as position itself as a household name pan-India across the biscuits, bakery, and liquid condiments markets.

The super success of the IPO has brought bigger responsibilities. Now, the onus is on us to prove ourselves and retain the faith reposed by investors in us. I have told my entire staff to work with utmost dedication and turn work into worship.1

- Rajni Bector,
Founder, Bectors Food, December 2020

Today as you know, we are one of the leading brands in biscuits and bakery business in North India, and we have established this brand from scratch. We hold a 4.5% market share in North India. We export 12% of the total biscuit exports from India.2

- Anoop Bector,
Managing Director,
Mrs. Bectors Food Specialities Ltd. (MBFSL),
December 2020

As an entrepreneur first you have to create a product and then develop a market accordingly because nobody knows what the consumer needs and what they will like, it all depends on your gut feeling.3

- Akshay Bector,
Chair man and Managing Director,
Cremica Food Indu stries Pvt. Ltd. (CFIPL),
December 2016


Mrs. Bectors Food Specialties Ltd. (MBFSL), a manufacturer and exporter of premium biscuits and bakery products to retail and institutional markets, was the most successful Initial Public Offering (IPO) of 2020 in India. Headquartered in Punjab (a state in northern India), the company received full subscription for its IPO within two hours of the start of the bidding process. The company attracted bids nearly 198.02 times the number of shares on offer to become the third most subscribed IPO ever in terms of the number of times it was subscribed in the history of the Indian stock market.4 It was listed on the National Stock Exchange (NSE)5 on December 24, 2020.

Rajni Bector (Rajni) founded an enterprise (Bectors Food) in 1978 when she set up a small ice cream making unit in her backyard. Her passion for cooking and baking led her to pursue a course in baking from Punjab University once her children were old enough to go to boarding school. With support from her husband, Dharamvir Bector (Dharamvir), who purchased an electric churner and provided an initial investment of 20,000, Rajni began ice cream production on a larger scale from the backyard of her home in Ludhiana. After Dharamvir decided to wind up his family business and support his wife full-time in her venture, they moved into a commercial facility. The business became popular in Punjab for her ice creams.

The business scaled up with the entry of Rajni's three sons-Akshay Bector (Akshay), Ajay Bector (Ajay), and Anoop Bector (Anoop). After McDonald's entered India in 1993, it began looking for suppliers and Bectors Food became the sole supplier