Speciality Restaurants, the promoters of restaurant chains Mainland China and Oh! Calcutta, will hit the market with its initial public offering on Wednesday to raise around R182 crore. Interestingly, the IPO comes at a time when the primary market is not in the best of form and a recent large-sized issue was withdrawn due to poor response.
According to data available on the NSE website, the current calendar year has seen only five issues hitting the market with one of them ? Samvardhana Motherson Finance (SMFL)? being forced to withdraw as investors chose to stay away after participating in the roadshows.
Speciality Restaurants, meanwhile, will launch its IPO on May 16 and is offering 1.17 crore equity shares in a price band of between R146 and R155. Kotak Mahindra Capital is the merchant banker managing the offering that will close on May 18. Even as the overall market sentiment remains weak, the promoters of Speciality Restaurants and bankers sound confident that the IPO will go through hitch-free.
?This IPO is a play on the consumption theme and we believe that companies like Speciality Restaurants have space under the sun,? said V Jayasankar, senior executive director, Kotak Mahindra Capital. ?Our feedback from investors is positive and we think that the price band is fair,? Jayasankar added.
For the nine-months ended December 31, 2011, Speciality Restaurants reported a net profit of R15.34 crore. Between FY07 and FY11, the net profit registered a CAGR of 49.60%. The basic and diluted earnings per share (EPS) was pegged at R5.20 for the nine-months ended December 31, 2011.
Interestingly, the IPO of SMFL was forced to withdraw even as investors like First State Investments (Hong Kong), Ivy Pacific Opportunities Fund, Birla Sun Life, Government of Singapore and Monetary Authority of Singapore subscribed to the anchor investor portion. The R1,665-crore IPO was subscribed only 0.23 times when it closed for bidding.