Barbeque Nation IPO Review

Barbeque Nation IPO comprises fresh issue of shares worth ₹180 crore and an offer for sale of up to 5.46 million equity shares by current promoters and shareholders. The company is promoted by Sayaji Hotels, Sayaji Housekeeping Services, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani. It is backed by private equity firm CX Partners. The promoters hold 60.24% stake, CX Partners owns 33.79% and Alchemy Capital (Rakesh Jhunjhunwala’s investment firm) holds 2.05 per cent in the company.

Barbeque Nation IPO Details:

Related Posts:

Issue opens Wed, 24 Mar 2021
Issue Closes Fri., 26 Mar 2021
Issue DetailsFresh Issue oupto ₹ 180 Cr and OFS upto 5,457,470 equity shares
Issue size: ₹ 452 – 453 Cr
No. of shares9,071,927 – 9,057,470
Face ValueRs. 5
Price band : ₹ 498 – 500
Bid Lot:30 Shares
QIB50%
NII’s15%
Retail10%

  • ANCHOR ISSUE: IPO bound Barbeque Nation raised Rs 202.89 crore from 21 anchor investors. The anchor investors include Goldman Sachs India Ltd, Nomura Funds Ireland Public Limited Company, Fidelity Investment Trust, SBI Mutual Fund (MF), ICICI Prudential MF, Kotak MF, Aditya Birla Sunlife MF, HDFC MF, HDFC Life Insurance Company, Kuber India Fund, Pioneer Investment Fund & UPS Global Trust.

About Barbeque Nation

  • Barbeque Nation Hospitality Limited was incorporated on October 13, 2006.
  • The company owns and operates Barbeque Nation Restaurants, one of India’s leading casual dining restaurant chains and International Barbeque Nation Restaurants.
  • It also owns and operate Toscano Restaurants and You and Barbeque (“UBQ”) by Barbeque Nation.
  • The first Barbeque Nation Restaurant was launched in 2006 by Sayaji Hotels Ltd., one of the promoters. They launched their 1st Barbeque Nation Restaurant in 2008, and subsequently the company acquired 5 Barbeque Nation Restaurants owned by SHL in 2012.
  • As of December 31, 2020, the company has 164 restaurants owned and operated by them which includes 147 Barbeque Nation Restaurants across 77 cities in India, 6 International Barbeque Nation Restaurants across 4 cities outside India and 11 Italian Restaurants across 3 metro cities in India of which 9 are operated under the brand name “Toscano” and 1 each under the brand names “La Terrace” and “Collage”, respectively. International Barbeque Nation Restaurants are as 2 in Dubai, 2 in Abu Dhabi, 1 each in Kuala Lumpur and in Muscat.
  • Through their Barbeque Nation Restaurants, they pioneered the format of ‘over the table barbeque’ concept in Indian restaurants.
  • The company has integrated digital ecosystem of app, reservation system, delivery & loyalty program. They have managed risks due to Covid19 with consistent recovery.
  • The company has significant online presence. Barbeque Nation Hospitality Limited witnessed increased reservations through their online platforms. In Fiscal 2020 and the 8 months ended November 30, 2020, over 46.7% and 60.8% of total reservations at Barbeque Nation Restaurants were made online. As of December 31, 2020, company’s BBQ App had registered over 2.2 million downloads

Barbeque Nation IPO: Financials

Paertculars/Rs. Cr. 2020(8)FY20Fy19Fy18
Revenue from Operations201846.97739.02586.34
Revenue Growth (%)14.58%25.76%
EBITDA as stated12.59168.04149.39140.37
EBITDA (%) as stated5.32%19.75%20.12%23.77%
Adj. EBITDA as stated-52.1778.2577.7382.39
Adj. EBITDA (%) as stated-22.05%9.20%10.47%13.95%
Profit Before Tax-126.5-25.14-6.8219.16
Net Profit/(Loss) for the period#-100.65-32.93-38.39-5.8
Equity Share Capital14141413.8
Reserves-28.92-8.08117.64131.19
Net worth-14.925.92131.63144.99
Long Term Borrowings135.51165.06109.385.44
Short Term Borrowings37.8341.4715.7118.51
Net Asset Value (₹ )-5.332.1147.0452.53
FV5
Equity Post IPO15.80
IPO Price500
Market Cap1580
Market Cap  /  Sales1.9

Pros

  • Barbeque Nation Limited is one of the leading online travel agencies in India.
  • The company has a consistent track record of financial and operational performance with lean and cost efficient operations.
  • It has in-house advanced technology and analytics capabilities;
  • The company has been making profits.
  • It has  Wide distribution network supported by a hybrid platform.
  • Well-recognized brand with a targeted marketing strategy and customer centric approach
  • Experienced management team with an established track record.

Cons

  • There has been adverse effect of COVID-19 pandemic on the operations.
  • Company may take a long time to come to profit
  • Competition in the sector.

Barbeque Nation IPO: Assessment

The company undertook a Pre-IPO Placement of 5,951,132 Equity Shares @ Rs. 252/ – per share, aggregating to ₹149.97 crore:

EntityShare alloteedRs. In Cr.
Xponentia Opportunities Fund-I (“Xponentia”)15,87,30240
Jubilant Foodworks Ltd.(“Jubilant”),                                                                              36,50,79492
Other Individual and Employee                                                                                                    7,13,03617.97
Total                                                                                                                                              149.9759,51,13259,51,132
  • Against the Pre-IPO placement @ Rs. 252 per share, barely two months before, Barbeque Nation Hospitality is now asking almost double the price.
  • Barbeque Nation IPO was earlier expected in 2017. The company had filed IPO papers with Sebi seeking to raise Rs 700 crore. However, SEBI kept the processing of proposed IPO in abeyance pending regulatory action for past violations by promoter ‘Sayaji Hotels’.
  • Barbeque Nation paid a dividend of 20% for FY18 as well as FY19. It skipped dividend for fiscal FY20.
  • Based on post-IPO NAV of Rs. 83.92, the issue is priced at a P/BV of 5.96.
  • Company’s new delivery product “Barbeque in a Box” has added significantly to the delivery offering and revenue. Its Delivery business has seen a 53% MoM Growth (Nov 20 vs April 20)
  • Post-Covid the business has reached 84% of the pre-COVID business in November 2020.
  • Operating margins of the company are at a healthy 20%. The revenue has grown at CAGR 20% in the last 3 years and the store network has grown at CAGR 26% in the last 3 years
  • Even though company has demonstrated good growth in revenues, the Barbeque Nation IPO may be suited only for investors willing to take the risk.
  • Barbeque Nation IPO was last reported to be commanding a NIL or very meager GMP.
  • There is relatively less chance that I apply in Barbeque Nation IPO. The company’s past operational record looks OK, kit jas on board marque investors, but it is difficult to digest how against Pre-IPO placement @ Rs. 252 per share, barely two months before, Barbeque Nation Hospitality is now asking almost double the price.

Standard disclaimer:  I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2)  Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors.  I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or  leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

Leave a Reply