The public issue of causal dining restaurants chain Barbeque Nation Hospitality is subscribed 1.33 times on the first day of bidding, March 24, so far as investors have put in bids for 66.46 lakh equity shares against the offer size of 49.99 lakh shares, the subscription data available on exchanges showed.
The issue size has been reduced to 49.99 lakh equity shares from 90.71 lakh equity shares after the company raised Rs 203 crore from anchor investors on March 23, a day before the issue opening.
So far the retail investors are lending support as they have put in bids 6.14 times more than their reserved portion. The part set aside for non-institutional investors was subscribed 7 percent and that of employees 41 percent, while qualified institutional buyers' part was subscribed 37 percent.
Barbeque Nation Hospitality is planning to mop up Rs 452.87 crore through public issue including fresh issue of Rs 180 crore. The net fresh issue proceeds will be used for repaying of debts availed by the company.
Also read our in-house research team's take on Barbeque Nation Hospitality IPO
The price band for the offer has been fixed at Rs 498-500 per share, which is nearly double compared to its pre-IPO placement issue price of Rs 252 per share. The company had raised Rs 150 crore through pre-IPO placement.
Barbeque Nation is India's leading casual dining restaurant (CDR) chains (in terms of outlet count as of September 2020) and International Barbeque Nation Restaurants. The company owns and operates Toscano Restaurants and UBQ by Barbeque Nation Restaurants.
Also read Experts' take on Barbeque Nation IPO
While recommending neutral rating to the IPO, Angel Broking said the company has posted revenue growth of 20 percent CAGR between FY18 and FY20, but it has been continuously incurring losses at PAT level despite topline growth.
The COVID-19 pandemic also has had an adverse impact on the operations of the company hence the brokerage expects profits will remain under pressure over the medium term.
"At the higher end of the price band the company is asking for a valuation of 2.4x FY20 EV/Sales which we believe is expensive given the current environment," said Angel Broking.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.