The IPO of Big Bull Rakesh Jhunjhunwala-invested restaurant chain Barbeque Nation will open for subscription on 24 March. Investors will be able to subscribe to this IPO by 26 March. Barbeque Nation has appointed IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets as the book running lead managers to this public issue.
Rakesh Jhunjhunwala will not sell his stake
Legendary investor Rakesh Jhunjhunwala has refused to reduce his stake in Barbeque Nation. They will not release their shares for the IPO of Barbeque Nation. Barbeque Nation’s IPO includes investors such as Kayam Dhanani, Zoya Dhanani and Pace Private Limited among investors who have refused to issue their shares with Rakesh Jhunjhunwala’s company Alchemy Capital.
The company has lost every year since FY18
It is a trusted brand with India’s fastest growing QSR company. The company has a good record of revenue growth. The company’s strategy is to increase its store sales as well as to increase revenue and profit. The company intends to expand to other cities in India. However, the company has incurred net loss every year since FY18, while revenue has grown during this period.
The company had a net loss of Rs 32.93 crore in FY20 while its revenue was Rs 846.97 crore. Similarly, the company incurred a loss of Rs 38.4 crore in FY19, while its revenue was Rs 739 crore. At the same time, the company had a net loss of Rs 5.8 crore in FY18 and its revenue was Rs 586.3 crore. That is, from 2018, its loss also increased with the revenue of the company.
Whereas, the company performed better at the operating level. The company’s EBITDA i.e. Earnings before Tax stood at Rs 140.37 crore in FY18, 149.39 crore in FY19 and Rs 168 crore in FY20.
Expert opinion on IPO
Rajesh Agarwal of AUM Capital advises that one should invest in this IPO. They do not have any major competitors in their segment. Further, there may be a good growth in the business of the company. It can be invested for long term. There is some apprehension in the short term, given the growing case of Corona, but given the enthusiasm in the market for the IPO, one can invest in this IPO.
10 special things of IPO
1. The price band for this IPO of Barbeque Nation has been fixed at Rs 498-500. A lot of the issue of the company will be 30 shares. That is, you have to bid for at least 30 shares. The company’s listing will be on the stock market on April 7.
2. The company reserves 75 per cent of the total issue for Qualified Institutional Buyers (QIBs). 10 per cent is reserved for retail investors and the remaining 15 per cent is reserved for non-institutional investors. The company has reserved reserves of 2 crore rupees for its employees.
3. For this IPO, the company has issued fresh issues worth Rs 180 crore. However, 54.57 lakh shares with face value of Rs 5 will be sold through the offer for sale. The company is in the process of raising 452 crore rupees.
4. The promoters of the company are Sayaji Housekeeping Service, Qayum Dhanani, Rauf Dhanani and Suchitra Dhanani. All of them together hold 60.24 per cent stake in the company.
5. At the same time, CX Partners holds 33.79 per cent and Rakesh Jhunjhunwala’s investment firm Alchemy Capital holds 2.05 per cent stake.
6. Investors of the company who will sell their stake through the offer for sale include the company’s promoters Sayaji Housekeeping Service, Azhar Dhanani, Saadia Dhanani, Sanaya Dhanani, Tamara, Aajav Investment Trust and Menu Private Limited.
7. The company’s shares will be listed on the BSE and NSE. Barbeque Nation and Tamara have already raised Rs 149.97 crore by selling 59,51,132 equity shares.
8. The company has raised funds in pre-IPO placements at Rs 396.82 per share. This has reduced the size of the company’s fresh issue from Rs 275 crore to Rs 180 crore.
9. The company will use the funds raised from the fresh issue to repay the loan and expand the restoration. While the promoters will get the money for the offer for sale.
10. The company opened its first Barbeque Nation restaurant in 2008. The company has so far opened 147 restaurants in 77 cities across the country. As of December 2020, there were 6 outlets in three countries.
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