Barbeque Nation share lists at discount to IPO price; stage intra-day recovery to hit upper circuit

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Updated: Apr 07, 2021 4:33 PM

Barbeque Nation raise Rs 452 crore from the issue earlier last month, with investors from all categories oversubscribing their portion.

Barbeque nationBarbeque Nation is one of India’s leading casual dining restaurant chains with 164 restaurants.

Rakesh Jhunjhunwala backed Barbeque Nation Hospitality made a weak listing on the stock exchanges today. Shares of the firm began trading at Rs 492 per share, down 1.6% from the issue price of Rs 500 apiece. However, as the day’s session progressed the debutant stock zoomed 20% to hit the upper circuit and closed at Rs 590.4 per share. Barbeque Nation is the eighteenth stock to list on the bourses this year and the first to debut in the new financial year. On debut, Barbeque Nation Hospitality shares had a market capitalization of Rs 1,847 crore. Ace investor Rakesh Jhunjhunwala’s Alchemy Capital owns a stake in Barbeque Nation Hospitality.

Check live price: Barbeque Nation Hospitality

Barbeque Nation raise Rs 452 crore from the issue earlier last month, with investors from all categories oversubscribing their portion of the IPO. The IPO of Barbeque Nation was subscribed nearly 6 times by investors. Bids were received for 2.99 crore shares against 49.99 lakh shares on offer. Post issue, promoter shareholding in the company will drop to 37.8% from 47.8% pre-issue, while public shareholding will increase from 52.2% to 62.2%.

Barbeque Nation is one of India’s leading casual dining restaurant chains with 164 restaurants. Further, the company owns a 61.35% stake in a company called “Red Apple”, which operates 11 Italian cuisine restaurants. The firm operates a large number of restaurants in metro cities where average billing reaches nearly Rs 900 compared to Rs 650 in tier-II & tier III cities. Over the next two years, the company would be spending Rs 90 crore to expand its operations in existing cities.

Domestic brokerage firm ICICI Direct, earlier in a note said that at the IPO price, Barbeque Nation is at 2.4x FY20 EV/sales. “The chain CDR industry is expected to grow at a faster pace over the next five years. However, we believe the bigger size restaurants and limitation in scaling up delivery sales can impact the growth for the company,” they said. 

Meanwhile, Yes Securities in a note highlighted that a pre-IPO allotment was done by the firm earlier in December and January at 50% less than IPO price. “We also note that earlier fundraises in 2018 have been done at a much higher price, but fundamentals have deteriorated since,” Yes Securities added while pinning an ‘Avoid’ tag on the issue.

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