Barbeque Nation IPO Review – Should you Subscribe?

Barbeque Nation IPO Date, Issue Price, Risk Factors and Review

Indore based Barbeque Nation IPO would open for subscription on 24th March, 2021. Barbeque Nation Hospitality is one of the leading casual dining restaurant chains in India. It offers the best quality of food offerings, ambiance, and services to its customers. Investors have been waiting for Barbeque Nation IPO expected date in the last 2-3 months and finally it is announced now. Should you invest in Barbeque Nation IPO? In this article we would provide Barbeque Nation IPO dates, IPO Price band, market lot, reasons to invest, risk factors, IPO Price valuations and final review whether one should invest or avoid.

Also Read: Consistent Performing Largecap Stocks to invest

About Barbeque Nation India Limited

Barbeque National Hospitality owns and operate Barbeque Nation Restaurants, one of India’s leading casual dining restaurant chains and International Barbeque Nation Restaurants.

They also own and operate Toscano Restaurants and UBQ by Barbeque Nation Restaurant.

The first Barbeque Nation Restaurant was launched in 2006 by SHL, one of its Promoters. The company launched its first Barbeque Nation Restaurant in 2008, and subsequently acquired five Barbeque Nation Restaurants owned by SHL in 2012.

They have steadily grown its owned and operated Barbeque Nation Restaurant network from a single restaurant in 2008 to 147 Barbeque Nation Restaurants (including opened, temporarily closed and under construction outlets) across 77 cities in India and 6 International Barbeque Nation Restaurants in three countries outside India.

Barbeque Nation competitive strengths

1) It is one of the fastest-growing restaurant brands in India.

2) Company has diversified offerings for both vegetarian and non-vegetarians.

3) Company has experienced promoters and managers team.

4) Healthy financial position with a proven track record of revenue growth.

Barbeque Nation IPO Dates, Price Band and Issue Details

IPO Opening Date 24-Mar-21
IPO Closing Date 26-Mar-21
Issue Type Book Built Issue IPO
Face Value Rs 5 per equity share
IPO Price band Rs 498 to 500 per equity share
Market Lot 30 Shares
Min Order Quantity 30 Shares
Listing at BSE and NSE
Issue Size Total Rs 452.87 Crores
i) Fresh issue – Rs 180 Crores
ii) OFS – 272.87 Crores

Note: Barbeque Nation IPO Issue Price is confirmed now.

Download Barbeque Nation Limited IPO DRHP

Download Barbeque Nation Limited IPO RHP

Objects of issue

Here are the objects of the IPO issue.

1) Offer for Sale (OFS) – In this, selling share holders would sell their shareholding and company would not get any proceeds from this issue.

2) Fresh issue of shares which would be utilized for the following:

i) Capital expenditure for expansion and opening of new restaurants

ii) Prepayment or repayment of all or a portion of certain outstanding borrowings availed on a consolidated basis

iii) General corporate purposes

Who are the company promoters?

Sayaji Hotels Limited, Sayaji Housekeeping Services Limited, Kayum Dhanani, Raoof Dhanani, and Suchitra Dhanani are the promoters of the company.

Company Financial Performance

Here are the consolidated revenue and profit details in the last 3 years and 8 months.

For the year / Period ending Total Revenues (Rs in Millions) Profits after tax
(Rs in Millions)
Profit %
Mar-2018 5,904.4 -58.0 -1.0%
Mar-2019 7,425.4 -383.8 -5.2%
Mar-2020 8,507.9 -329.2 -3.9%
8 Months ending Nov-20 2,366.0 -1,006.4 -42.5%

Its EPS for FY2020 is negative  and last 3 years EPS is negative as company has been incurring losses.

Why to invest in this IPO?

Here are a few reasons to invest.

1) Barbeque Nation Hospitality Limited is one of the leading casual dining restaurant chains in India.

2) Company has generated strong revenue growth in the last 3 years and 8 months.

3) Rakesh Jhunjhunwala (Indian Warren Buffet) has invested in this company and heard that he would continue to invest post IPO listing.

Risk Factors of investing in this IPO

1) Company has been incurring losses in the last 3 years and 8 months.

2) The outbreak of the novel coronavirus pandemic and subsequent lockdowns and government of India measures to reduce the spread of Covid-19 had substantial impact on restaurant operations. We do not know how long this pandemic would continue.

3) Deterioration in the performance of relationship with third party delivery aggregators may adversely impact its business.

4) If the company is unable to implement its growth strategy successfully, especially in relationship to selecting cities for new restaurants can adversely affect the company.

5) The company has been issued a notice from the National Anti-Profiteering Authority under the GST Act. Any adverse decision can impact company operations.

6) Some of the company promoters are involved in SEBI proceedings in relation to certain non-compliances under securities related law.

7) One of the non-executive and independent directors has been named in CIBIL suit filed accounts list. In the event if his name comes in wilful defaulter list, company might have adverse impact in its reputation and operations.

8) Some of its promoters and directors operates of control entities engaged in a similar line of business and this can lead to competition with the company.

9) If they are unable to continue to build the Barbeque Nation brand or the Toscano brand, its business, reputation and results of operations may be adversely affected.

10) One of its Promoters and Directors, Raoof Dhanani is involved in a criminal proceeding and in an insolvency proceeding. Any adverse decision in these matters may have an indirect impact on the reputation and business of the company.

11) For complete internal and external risk factors, you can refer the RHP of the company

Barbeque Nation IPO Dates / Time Table / IPO Schedule

Offer Open 24-Mar-21
Offer close 26-Mar-21
Finalization of Allotment 01-Apr-21
Initiation of Refunds 05-Apr-21
Credit to Demat Account 06-Apr-21
IPO Shares Listing Date 07-Apr-21

How to apply this IPO?

You can login to your demat account, visit IPO section and click on the IPO link of Barbeque Nation Limited. You can then enter minimum lot quantity and price band and then submit.

IPO Price Valuations

Barbeque Nation IPO Issue Price band is Rs 498 to Rs 500.

Since the company has been incurring losses in the last 3 years and 8 months, has negative EPS, we cannot ascertain the P/E ratio and we cannot indicate whether the issue price is under priced or overpriced.

Also Read: Which are the Top Performing Mutual Funds in last 15 years?

Barbeque Nation IPO Review – Should you invest?

Barbeque Nation Hospitality Limited is one of the leading casual dining restaurant chains in India.

The company has shown strong revenue growth in the last 3+ years.

It has been incurring losses in the last 3 years and 8 months.

Barbeque Nation IPO price cannot be validated whether the issue price is under priced or over priced due to negative EPS.

Rakesh Jhunjhunwala investment in this company is creating some buzz in the stock market. Recent Nazara Technologies IPO where Rakesh was holding stake got oversubscribed by 175 times.

High risk investors can invest in this IPO for the listing gains. In the short term to medium term one need to observe company performance before buying the shares.

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