Barbeque Nation closes at 18% premium to issue price

The stock opened at ₹492 on the BSE.
The stock opened at ₹492 on the BSE.
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 2 min read . Updated: 07 Apr 2021, 10:19 AM IST Ravindra N. Sonavane

Mumbai: Shares of Barbeque Nation Hospitality closed at 18% premium on their stock market debut on Wednesday. The initial public offering last month was subscribed six times.

Earlier on Wednesday, the stock opened at a nearly 2% discount of ₹492 on the BSE.

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Barbeque Nation’s stock debut came at a time when several states across the country have started putting restrictions on businesses and people movement to contain the fast spreading second wave of covid-19.

“At current price the stock trades at 3.4x EV/Sales which is at a discount to other peers like Jubilant Foodworks (Domino’s) and Westlife Development (McDonalds). However, the company has reported net loss in three out of the four previous fiscals. That apart the second wave of pandemic has raised the risk of further slower growth in the near term," said Siddhartha Khemka, Head – Retail Research, Broking & Distribution, Motilal Oswal Financial Services.

Last month, the ₹453 crore Barbeque Nation issue received bids for 2.99 crore equity shares against the offer size of 49.99 lakh equity shares. Retail investors submitted bids 13.13 times the reserved portion, while that of non-institutional investors was subscribed 3.10 times.

The IPO comprised a fresh issue of shares worth ₹180 crore and an offer for sale of up to 5.46 million equity shares by current promoters and shareholders.

Net proceeds aggregating to ₹54.62 crore will be used for setting up 26 new Barbeque Nation Restaurants during fiscal 2022 and 2023, the company had said.

The company also intends to pay around ₹75 crore outstanding borrowing obtained by the company. As of November 2020, net debt of the company stood at ₹148.10 crore.

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For fiscal year 2020, the company reported a revenue of ₹846.97 crore against ₹739.02 crore a year ago. Net loss for the period stood at ₹32.93 crore versus ₹38.39 crore.

As of December, the company had 164 restaurants owned and operated-- 147 Barbeque Nation restaurants across 77 cities in India, six international restaurants across four cities outside India and 11 Italian restaurants across three metro cities in India .

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