BIKAJI trade ideas
Q&A_ Why Bikaji foods IPO was a flop?Namaste!
Bikaji Foods and Haldiram's control 50% of the organized namkeen market in India. The people, mostly retail would have thought this would be a blockbuster IPO considering whopping 80.63 times by QIBs (Qualified Institutional Buyers). Generally this kind of oversubscription leads to very good listing gains, but this time it didn't happened.
The reasons according to me are following:-
1. It doesn't have a value at this price: Sure, it is (along with Haldiram's) are market leaders in "organised" market, but what about unorganised market? These include the local samosewala, chai ki tapri, Gujrati and Rajasthani folks, etc selling namkeen and related products.
It's face value is Rs 1. It looks like they had split shares 1:10 before the IPO.
2. It's EPS has fallen aggressively due to split: It's EPS (Earning Per Share) is Rs 3.2. If you put this value to Sir Benjamin Graham's formulae, you would get IV (Intrinsic Value) as Rs 112 if YoY growth is expected as 20% and 10 year yields as 6.1%. The IPO price was Rs 300, I don't have to explain further.
*Fun-fact*: There are different methods to value a company, I prefer Sir Ben Graham's formulae because it seems very logical to me. Their method will not apply for loss making companies. Such companies have to be evaluated based on Comparative company analysis, Sales increase/growth analysis, discounted cash flow analysis, etc.
3. What should retail people do?
A: Gather knowledge. Learn to value a company or IPO. Give some time to understand it. The more you learn, the more you earn (ofourse sometimes by investing in IPOs :)
Disclaimer: The analysis I have shared is based on my understanding and experience in the markets. Please do your own analysis and/or consult your financial advisor before investing and/or trading.
Healthy correction and now coming to strong supporthaving strong potential to grow, can be added around 340 for long term.
BIKAJI FOODS INTERNATIONAL : SHORTUnited States Based FMCG Company , listed in Nov 2022 is Still waiting for price correction. The subscription stock value which was Rs. 285 jumped to 450 within 3 days and since then there is continuous fight for Price correction. We can see the triangle pattern on the chart where the price was getting continuous rejection from resistance level @ 448.20 , However , the buyers were aggressively not letting the the price below pervious swing. However it seems that the stock has just broken the trend line and price correction may occur any time with break down@ 373.35.
Good stock for Intraday Selling Trade in Bearish Market. The indicators are as under
CMP : 373.35
MA50 : 392.44
MA200 : 355.02
RSI (14): 39.606
ADX(14) : 53.77 ( High Directional Strength )
ATR (14) :10.58 ( Less Volatile )
MACD ( 12,26) : -5.99
Although , we can not ignore the case of Break Out from this range, but I would prefer to with Shorting as the Stock is over priced and need their first price correction. Hence the probability of Break down is much higher than that of break out.
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BIKAJI - Ichimoku Bullish Breakout Stock Name - Bikaji Foods International Ltd
Ichimoku Cloud Setup :
1). Today's close is above the Conversion Line
2). Future Kumo is Turning Bullish
3). Chikou span is slanting upwards
All these parameters are showing bullishness at Current Market Price
and more bullishness AFTER crossing 447
#This is not Buy and Sell recommendation to any one. This is for education purpose and a helping hand to learn trading in Market.
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Bikaji daily chartBikaji is forming a flag and pole pattern on daily charts with volumes dry up. Potential Breakout on the cards.
BIKAJI - IPO BASE BREAKOUTStock broke out into new high ground after just a 10% deep correction post listing
