Casual dining restaurant chain operator, Barbeque Nation Hospitality, will open its initial public offering for subscription on March 24. The issue will close on March 26.
The book running lead managers to the issue are IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets. Equity shares offered in the IPO are proposed to be listed on the BSE as well as National Stock Exchange.
Here are 10 key things to know about the public issue:
1) IPO Details
The IPO comprises a fresh issue of Rs 180 crore and an offer for sale of up to 54,57,470 equity shares by existing selling shareholders.
Shareholders – Sayaji Housekeeping Services, Azhar Dhanani, Sadiya Dhanani, Sanya Dhanani, Tamara, Aajv Investment Trust and Menu Private Limited – will offload their stake through offer for sale.
The company has reserved Rs 2 crore worth of equity for its employees. Investors can bid for a minimum of 30 equity shares and in multiples of 30, thereafter.
The anchor book, if any, will open for bidding on March 23, a day before the issue opening.
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75 percent of the total book size is reserved for qualified institutional buyers, 10 percent for retail investors and the remaining 15 percent for non-institutional investors.
2) Price Band
The price band for the offer has been fixed at Rs 498 – Rs 500 per equity share.
3) Fund Raising
Barbeque aims to raise Rs 451.78 crore – Rs 452.87 crore at the given price band.
4) Objectives of Issue
The company will utilise the net proceeds from the fresh issue towards expansion and opening of new restaurants, repayment of certain outstanding borrowings, and for general corporate purposes.
The offer for sale money will go to existing shareholders who are offloading stake.
5) Company Profile
Barbeque-Nation Hospitality pioneered the format of ‘over the table barbeque’ concept in Indian restaurants according to the Technopak Report. The first Barbeque Nation restaurant was launched in 2006 by one of the promoters, Sayaji Hotels. Barbeque-Nation Hospitality launched its first Barbeque Nation restaurant in 2008 and subsequently acquired five restaurants owned and operated by Sayaji Hotels in 2012.
As of December 2020, Barbeque-Nation Hospitality currently operates 147 Barbeque Nation restaurants (including opened, temporarily closed and under construction outlets) across 77 cities in India and six international Barbeque Nation restaurants across three countries namely UAE, Oman and Malaysia.
City-wise presence of Barbeque Nation Restaurants:Barbeque-Nation Hospitality acquired 61.35 percent stake in Red Apple Kitchen Consultancy which currently owns and operates Italian restaurants under the brand name ‘Toscano’, a casual dining Italian restaurant chain operating in Pune, Bengaluru and Chennai; ‘La Terrace’ and ‘Collage’.
Barbeque Nation had introduced UBQ to provide a-la-carte Indian cuisine in the value segment. As of December 2020, the company was providing delivery in 77 cities in India under UBQ from its existing kitchen infrastructure. It also launched ‘Barbeque-in-a-Box’ in June 2020 as one of their delivery products. This is in addition to two other products, ‘Grills in a Box’ and ‘Meals in our Box’, which are offered through delivery among other offerings.
a) Barbeque Nation is one of India’s fastest growing and widely recognised restaurant brands in the rapidly growing casual dining restaurant (CDR) market.
b) The company has experienced steady growth in covers and consistent APC with a relatively high proportion of total revenues from weekday sales and lunch covers.
c) The compnay has an attractive offerings based on constant menu innovation and customer focus.
d) The company has strong business processes and back-end systems that have been established over the past 14 years, leading to efficient operations.
e) Barbeque has experienced staff and value-oriented business culture led by some of promoters and senior management team bringing experience from well-known hospitality brands.
f) It has proven track record of revenue growth.
a) The company intends to increase same store sales growth, revenue per store and profitability as the vintage of Barbeque Nation
b) The company intends to continue expansion in Indian cities.
c) It intends to preserve customer and team-focused culture and values.
d) The company intends to continue to roll out primarily owned and operated restaurants and franchise owned (whether franchise or company operated) restaurants in select international cities.
e) It intends to continue evaluating strategic brand acquisitions.
Considering the short financial history, Barbeque-Nation Hospitality continued to report losses in every financial year since FY18, though revenue has been increasing in same periods.
The company reported consolidated loss at Rs 32.93 crore on revenue of Rs 846.97 crore in FY20, loss at Rs 38.4 crore on revenue of Rs 739 crore in FY19 and loss at Rs 5.8 crore on revenue at Rs 586.3 crore in FY18. For eight months period ended November 2020, it posted a loss of Rs 100.65 crore on revenue Rs 201 crore, largely impacted by the COVID-19 pandemic.
But at the operating level, the performance remained better with EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 140.37 crore, Rs 149.39 crore, Rs 168 crore and Rs 12.59 crore in FY18, FY19, FY20 and in eight months period ended November 2020,
9) Promoters, Shareholding and Management
The promoters of Barbeque Nation Hospitality are Sayaji Hotels, Sayaji Housekeeping Services, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani. Promoter and promoter group’s shareholding stood at 47.80 percent and the rest is held by public shareholders.
The list of Shareholders holding 1% or more of the paid up share capital of the company:
Promoter Sayaji Housekeeping Services held 37.07 percent stake in Barbeque-Nation, Tamara (TPL) 17.85 percent shareholding, Jubilant Foodworks 10.72 percent and PPL 9.35 percent in the company as of March 18, 2021.
Jhunjhunwala’s investment firm Alchemy Capital holds 1.69 percent in the company.
CX Partners Fund I, through TPL and AAJV Investment Trust, invested in the company in 2013. Xponentia Opportunities Fund and Jubilant Foodworks invested in the company in December 2020 and January 2021 respectively
T Narayanan Unni is the Chairman and a Non-Executive Director and Independent Director of the company. He has been a Director of the company since February 9, 2009. He is a member of the Institute of Chartered Accountants of India and he has been a practising chartered accountant since July 1, 1975.
Kayum Dhanani is the Managing Director of the company.
Rahul Agrawal is the Whole-time Director and Chief Executive Officer of the company. Prior to joining the company, he was associated with Ernst & Young and Beacon BVM Advisors. He was also associated with CX Advisors LLP.
Raoof Dhanani, Suchitra Dhanani and are Non-Executive Directors on the board, while Tarun Khanna is the Non-Executive, Nominee Director. Abhay Chaudhari and Natarajan Ranganathan are Non-Executive, Independent Directors.
Amit V Betala is the Chief Financial Officer of the company. Prior to joining the company, he has more than seven years of experience in various organisations including Clix Capital and Axis Bank.
10) Allotment, refunds and listing dates
Barbeque Nation Hospitality in consultation with merchant bankers will finalise the IPO share allotment around April 1, and the fund will be refunded around March 5.
Equity shares will get credited to eligible investors’ demat accounts around March 6, and the trading in equity shares will begin with effect from March 7, as per the schedule available in company’s red herring prospectus.