Barbeque Nation IPO

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About Barbeque Nation:

They own and operate Barbeque Nation Restaurants, one of India’s leading casual dining restaurant chains according to the Technopak Report.

The first Barbeque Nation Restaurant was launched in 2005 by Sayaji Hotels, one of their promoters. Five Barbeque Nation Restaurants owned by Sayaji Hotels were transferred to the company in 2012.

They have steadily grown their owned and operated Barbeque Nation Restaurant network from a single restaurant in Fiscal 2007 to 81 Barbeque Nation Restaurants in 42 cities in India (including one currently under renovation) and one restaurant in Dubai as of June 30, 2017. In addition, as of June 30, 2017, they had granted the franchise rights of one Barbeque Nation Restaurant.

On 26th Feb 2020 Barbeque Nation has opened its 16th outlet in Mumbai at Kandivali. This is the Barbeque Nation 147th outlet in India and 154th Internationally.

What Food Company Offers?

Through their Barbeque Nation Restaurants, they pioneered  ‘over the table barbeque’ concept in Indian restaurants according to the Technopak Report.

Under live grills that are embedded in dining tables allow the guests to grill their own barbecues. The company believes their Barbeque Nation Restaurants, compared to other fixed-price dining options, offer competitive attractions such as a wide range of vegetarian and non-vegetarian appetizers and main courses, a popular dessert menu, a pleasant and casual dining environment, and prompt service.

They also periodically run popular food festivals at Barbeque Nation Restaurants offering guests a range of Indian, International, and Fusion cuisines.

They are one of the few Indian companies in the organized Casual Dining Restaurant (“CDR”) segment to have the own in-house chef training school for the development of new products.

Collaboration with the American Hamburger Food Chain:

They have recently diversified into a second brand, becoming the India franchisee of the American hamburger chain, Johnny Rockets. As of June 30, 2017, they had five Johnny Rockets Restaurants in operation (they are currently in the process of relocating one of their Johnny Rockets Restaurants) and an additional one Johnny Rockets Restaurant was under construction. They intend to scale up their Johnny Rockets Restaurants, currently located in Bengaluru, Delhi, and Gurugram, to other Metro cities and Tier-I cities as well.

Awards and Recognitions:

They were ranked among the top 50 companies to work for in India across all categories by Economic Times “Great Places to Work” survey for 2016 and 2017 by Great Places to Work Institute in collaboration with the Retailers Association of India. They were also voted among the top ten employers within the Indian retail industry for 2017.

Objects of the Barbeque Nation IPO:

(i) Fresh Issue (Rs. 180 Cr.) The fresh Issue will be utilized for: a) Capital expenditure for expansion & opening of new restaurants by the Company b) Prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company on a consolidated basis (ii) OFS (Rs. 273 Cr.) Under OFS, shareholders are selling shares: a) Sayaji Housekeeping Services Ltd (“SHKSL”)– The Promoter Selling Shareholder Up to 1,018,288 Equity Shares. b) Azhar Dhanani- The Promoter Group Selling Shareholder Up to 339,430 Equity Shares. c) Sadiya Dhanani – The Promoter Group Selling Shareholder Up to 339,430 Equity Shares.

Barbeque Nation IPO Details:

Open Date: Mar 24 2021
Close Date: Mar 26 2021
Total Shares: 90,60,000
Face Value: ₹ 5 Per Equity Share
Issue Type: Book Building
Issue Size: 453 Cr.
Lot Size: 30 Shares
Issue Price: ₹ 498-500 Per Equity Share
Listing At: NSE,BSE
Listing Date: Apr 06 2021

Promoters And Management:

(i) 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. (ii) Kayum Dhanani is the Managing Director of the company. He has been a Director of the company since November 30, 2012. He has been associated with Sara Suole Pvt. Ltd. since 2005, which is involved in the business of manufacturing, processing and selling leather goods including, soles, shoes and other leather accessories. (iii) Rahul Agrawal is the Whole-time Director and Chief Executive Officer of the company. He has been a Director of the company since December 31, 2020. He joined the company on July 24, 2017.

Financials of Barbeque Nation IPO:

(Figures in Crs)
Year Revenue EBITDA Finance Cost PAT OPM NPM EPS
2015 304 47 8 13 16% 4% 5.07
2016 403 48 9 5 12% 1% 2.21
2017 503 66 14 10 13% 2% 3.8
2018 509 82 18 14 16% 2.9% 5.49
2019 742 149 56 -21 20% -2.8% -7.5
2020 850 168 75 -33 19% -3.85 -12
9MFY21 237 13 59 -99 5% -41.77 -36

Comparison With Peers:

Burger King and McDonalds are the Peer of the company. Though Burger King and McDonalds only supplying fast food, whereas, Barbeque Nation is the pure restaurant. a) Burger King  (i) Revenue(2020) = 841 Cr (ii) OPM = 12% (iii) Mcap = 5200 Cr (iv) Mcap/Sales = 6x b) McDonalds  (i) Revenue(2020) = 1548 Cr (ii) OPM = 14% (iii) Mcap = 7000 Cr (iv) Mcap/Sales = 4.5x c) Barbeque Nation (i) Revenue(2020) = 850 Cr (ii) OPM = 19% (iii) Mcap = 1800 Cr (iv) Mcap/Sales = 2x

Recommendation on Barbeque Nation IPO:

Review and Recommendation of InvestorZone are 5/10 1. The IPO is priced at an attractive valuation as compared to listed players in the chain restaurants. Moreover, company has shown excellent growth in the last 5 years. 2. The entry of Jubilant Food  as an investor will augur well for the company in future. Considering the kind of reach and management prowess they have. 3. The covid-19 scare which was the biggest dampener for the restaurant business in FY20-21 is slowly fading away with people are getting vaccinated.

Registrar of Barbeque Nation IPO:

  1. Link Intime India Private Limited

Discussion on Barbeque Nation IPO:

12 Comments

    Listing of Barbeque Nation Hospitality Limited on 07 Apr, 2021

    Symbol: BARBEQUE

    Series: Equity “EQ”

    BSE Code: 543283

    ISIN: INE382M01027

    Face Value: Rs 10/-

    Issue Price for the issue: Rs 500/- per share

    Barbeque Nation launched its IPO yesterday. As one of the leading Casual Dining Restaurants in India, the chain has over 147 outlets in 77 cities domestically and six outlets internationally.

    Although business was booming for the company from 2006 to 2013, large operational costs, the capital-intensive nature of business and the pandemic have acted as major downers for this famous restaurant chain that introduced the novelty offering of “over the table barbecue” for Indian customers a decade ago.

      Market is falling like nine-pins again. Many cities in MH are looking for an option of lockdown. Nervous time ahead.

    *Block the Dates for IPO Events:*

    – *Anupam*: Listing 24 March
    – *Laxmi* : Allotment 23, Listing 25 March
    – *Craftaman*: Allotmnt 23, Listing 25 March
    – *Kalyan*: Allotmnt 24, Listing 26 March
    – *Suryoday* : Allotmnt 24, Listing 30 March
    – *Nazara* : Allotmnt 25 Mar, Listing 30 March
    – *BBQ* : IPO launch24-26 March

    Alchemy India, the investment firm run by Rakesh Jhunjhunwala has invested in Barbeque Nation in March 2018 at Rs.832 per share. That was the time when Barbeque Nation was a hot business. We hope once covid-19 effect subdues, we will again see valuation soaring.

    Total investment was ~50 Crores.

    Valuation of Barbeque Nation:

    1. Shares before IPO = 3,39,42,920
    2. Fresh Issue = 3600000
    3. Total Shares = 3,75,42,920
    4. IPO Price = 500
    5. Mcap = 1877 Crores
    6. Revenue = 850 Crores (FY20)
    7. Mcap/Revenue = 2.1x.

    The business of the company was growing at excellent rate till 2020, when covid-19 hit the restaurant industries. The revenue which was just 350 crores in FY15 reached to 850 Crores in FY20, shows the kind of growth company has made. The continuous expansion of hotels has put pressure on bottom-line. Once the capex on hotels will start delivering results, it will give very good returns.

    The IPO is backed by Rakesh Jhunjhunwala. And recently, Jubiliant food has acquired shares at Rs. 252 per share. This gives lot of confidence in the company which was otherwise struggling due to covid-19.

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