It is a good sign for the market that more companies are coming up with IPO share launch proposals. The capital market suffered a nosedive when investors went for a frenzied selling spree as cases of COVID-19 started to surface in India. The last big company to announce an IPO share launch was SBI Cards and Payment Services during March. After that, there was a gap of four months until July. Although the lockdown is continuing is several parts of India, including the financial hub, Mumbai, the stock market is gradually opening up again. Barbeque Nation IPO launch is significant news for the market since hospitality is one of the worst affected sectors due to the pandemic. Barbeque Nation filed its IPO draft with SEBI in February and got the green signal from the regulator in July.
The BBQ Nation IPO proposal is a combination of fresh scrips and offer-for-sale stocks from the promoters, with a total target to gather Rs 1000-1,200 crores from the market. The company will also consider a pre-IPO placement of Rs 150 crore. According to sources, the funds from the share sales will go mainly to meet debt obligations and general corporate purposes.
Barbeque Nation Hospitality is promoted by Sayaji Hotels, Sayaji Housekeeping Services, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani and also private equity firm CX Partners. The latter made the first investment in 2013. Currently, the promoters are holding about 60.24 percent stakes in the company and CX holding 33.79 percent. Alchemy Capital, investment firm promoted by stock market investor Rakesh Jhunjhunwala also has a claim of 2.05 percent in BBQ Nation’s stakes.
Barbeque Nation is a popular casual dining restaurant. It currently has 138 outlets in different cities in India and UAE, Oman and Malaysia. In 2017, BBQ Nation first tried to launch IPO shares in the market, but the decision remained pending from SEBI citing past violations. Finally, in 2018, they received the approval but couldn’t launch due to adverse market condition.
SEBI has given the approval to launch an IPO size of Rs1000 -1200 crores which includes fresh shares worth of Rs 250 crore and 98,22,947 equity shares in offer-for-sale. The timing of the launch is significant. Currently, dining out is suspended due to the pandemic outbreak. In the current condition, restaurants are counting their mounting losses, and even many have gone out of business. However, things could be little better for big chains which may win the race against the small restaurants for which maintaining the current high standard of hygiene could be a struggle.
Barbeque Nation is yet to declare the IPO date, but it is expected sometime in July. IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets are appointed as the merchant banks by the promoters to assist with the listing.
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