Barbeque Nation’s much-awaited IPO could help its rival Domino’s parent firm Jubilant FoodWorks double its money in nearly two months time. Jubilant FoodWorks, the owner of Domino’s Pizza in India, had invested Rs 92 crore in Barbeque Nation, picking up shares for Rs 252 apiece in January this year. Now, with the IPO price band fixed at Rs 498-500 apiece, Jubilant’s investment could multiply. Barbeque Nation’s Rs 453-crore public issue opens for subscription tomorrow.
Jubilant FoodWorks to double its money
Ahead of the IPO, Jubilant FoodWorks was among investors that were allotted shares for Rs 252 apiece on a preferential basis in a pre-IPO placement. Jubilant FoodWorks was allotted 36.5 lakh equity shares for Rs 92 crore in January of this year, according to the RHP filed by Barbeque Nation.
Percentage terms, Jubilant FoodWorks now owns a 10.72% stake in the company, making it the third-largest shareholder behind promoters SHKSL and Tamara Private Limited. In less than two months since the pre-IPO placement, the value of Jubilant FoodWorks’ stake has doubled to Rs 182 crore at the higher end of the IPO price band. However, it is not known if Jubilant FoodWorks is looking to sell its gains on listing or hold the stake.
Jubilant FoodWorks operates in the same industry as Barbeque Nation. Among the likes of Burger King India, Speciality Restaurants Limited and Westlife Development, only Jubilant FoodWorks has a positive P/E ratio of 140.05. All others have a negative P/E ratio. Jubilant is also the only firm operating in the industry with a positive return on net worth, according to the RHP filed by Barbeque Nation.
Rakesh Jhunjhunwala among investors
Barbeque Nation also counts Rakesh Jhunjhunwala’s Alchemy India as an investor in the firm with a 1.69% stake. Earlier last year, Alchemy India was among the shareholders looking to sell its holdings through the IPO. Now, Alchemy India has decided against it and will continue to hold its stake till Barbeque Nation makes its stock market debut.
The IPO of Barbeque Nation is an amalgamation of a fresh issue worth Rs 180 crore and the remaining is an offer for sale (OFS) by existing shareholders including promoters Sayaji Housekeeping Services. The promoter and promoter group shareholding will come down to 37.79% through the IPO while public shareholding will increase to 62.21%. Barbeque Nation is looking to raise funds to open new restaurants and repayment of borrowings made by the company.
Eqwires Research Analyst
Call: +91 9624421555 / +91 9624461555