The first Barbeque Nation Restaurant was established in 2008 and as of November 30, 2019, the network has been steadily grown to 138 Barbeque Nation Restaurants in 73 cities in India and 7 International Barbeque Nation Restaurants in 3 countries outside India. The company has recently diversified into another brand “Red Apple” which operates 10 Italian restaurants in 2 cities of India i.e. Bengaluru and Chennai.
- One of India’s fastest-growing restaurant brands.
- Diversified offerings for both vegetarian and non-vegetarians.
- Experienced promoters and managers team.
- Healthy financial position with a proven track record of revenue growth.
Sayaji Hotels Limited, Sayaji Housekeeping Services Limited, Kayum Dhanani, Raoof Dhanani, and Suchitra Dhanani are the company promoters.
|Particulars||For the year/period ended (₹ in million)|
|Profit After Tax||(1,006.48)||(329.28)||(383.86)||(58.00)|
Objects of the Issue:
- To make prepayment/repayment of all or a part of the company’s outstanding borrowings availed on a consolidated basis.
- To meet general corporate purposes.
Barbeque Nation IPO Details
|IPO Opening Date||Mar 24, 2021|
|IPO Closing Date||Mar 26, 2021|
|Issue Type||Book Built Issue IPO|
|Face Value||₹5 per equity share|
|IPO Price||₹498 to ₹500 per equity share|
|Market Lot||30 Shares|
|Min Order Quantity||30 Shares|
|Listing At||BSE, NSE|
|Issue Size||Eq Shares of ₹5
(aggregating up to ₹452.87 Cr)
|Fresh Issue||Eq Shares of ₹5
(aggregating up to ₹180.00 Cr)
|Offer for Sale||5,457,470 Eq Shares of ₹5
(aggregating up to ₹272.87 Cr)
Barbeque Nation IPO Tentative Timetable
The Barbeque Nation IPO open date is Mar 24, 2021, and the close date is Mar 26, 2021. The issue may list on Apr 7, 2021.
|IPO Open Date||Mar 24, 2021|
|IPO Close Date||Mar 26, 2021|
|Basis of Allotment Date||Apr 1, 2021|
|Initiation of Refunds||Apr 5, 2021|
|Credit of Shares to Demat Account||Apr 6, 2021|
|IPO Listing Date||Apr 7, 2021|
Barbeque Nation IPO Lot Size
The Barbeque Nation IPO market lot size is 30 shares. A retail-individual investor can apply for up to 13 lots (390 shares or ₹195,000).
Barbeque Nation IPO Promoter Holding
|Pre Issue Share Holding||47.80%|
|Post Issue Share Holding||37.79%|
Stable profitability in mature stores
High growth prospects with an increase in outdoor eating habits and casual dining experience.
Fragmented Industry and heavy competition can stagnate growth
Any dent on brand reputation can lead to a large impact on business
Barbeque Nation is priced at 2x EV/Sales. Assuming the operating margin of the matured restaurants adj for rent is ~15%, the company is valued at 22x EBITDA on mature restaurants and ~1x Price to sales of newer restaurants. This amounts to a P/E of around 37x on mature restaurants on normalized earnings.
Using cash flow measure, the company is valued ~ 27x free cash flow (ex-growth CAPEX). Alternatively, Jubilant Foodworks recently bought a 10% stake in Barbeque Nations for Rs. 92 Cr, about half the market value asked in IPO. However, one may argue it was due to the strategic benefits Jubilant Foodworks brings to the table.
Considering the sound business model, industry tailwinds, high cash conversion, and not so aggressive valuation we recommend SUBSCRIBE to this issue.
We would wait for the performance to recover from Covid-19 restrictions. The relatively modest valuation reflects a likely delay in financial performance.
Note: We do not recommend buy just because the IPO market is hot. We do not earn any commission or fee for promoting IPOs so expect an honest review from us on a business model and valuation.