Barbeque Nation IPO subscribed 1.33 times on Day 1; retail portion booked over 6 times

Updated : March 24, 2021 09:52:14 IST

Investors have put in bids for 66.46 lakh equity shares against the offer size of 49.99 lakh shares.

The initial public offering (IPO) of causal dining restaurants chain Barbeque Nation Hospitality was subscribed 1.33 times on March 24, the first day of the bidding process. Investors have put in bids for 66.46 lakh equity shares against the offer size of 49.99 lakh shares, as per subscription data available on the exchanges.

The reserved portion for retail investors has been subscribed 6.14 times, while that of non-institutional investors is subscribed 7 percent at end of day. Employees’ portion is subscribed 41 percent, while qualified institutional buyers' part was subscribed 37 percent. The company has reserved shares worth Rs 2 crore for its employees.

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 15 anchor investors on March 23 ahead of the issue opening. The company had allocated 40.6 lakh equity shares at Rs 500 per share to the anchor investors.

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

The IPO comprises a fresh issue of equity shares aggregating up to Rs 180 crore and an offer for sale of up to 54,57,470 equity shares by existing selling shareholders. The company plans to raise Rs 452.87 crore through the issue.

Read here: Barbeque Nation Hospitality IPO opens today: Key things to know before investing

The company will utilise the net proceeds from the issue for expansion and opening of new restaurants, prepayment or repayment of all or a portion of certain outstanding borrowings and general corporate purposes.

IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets are the book-running lead managers to the issue.

Most brokerages are not very bullish on the issue due to consistent losses in previous years and also the impact of COVID-19 on the dine-in business. However, the company has shown a smart recovery of 84 percent of pre-COVID levels with an improving business outlook.

Brokerages believe the long-term growth story for the company is intact but they are not confident about the listing.

Read here: Barbeque Nation Hospitality IPO opens today: Should you invest?

YES Securities says the pricing looks on the higher side with not a lot left on the table for investors. "We also note that earlier fundraises in 2018 have been done at a much higher price, but fundamentals have deteriorated since," it said.

Despite a strong growth outlook for the space and strong brand equity for the company which should help gain market share, the brokerage advises avoiding the IPO, awaiting better entry opportunities post listing.

Published : March 24, 2021 02:33 PM IST

Barbeque Nation IPO subscribed 1.33 times on Day 1; retail portion booked over 6 times

You May Also Like

Karnataka to purchase 1 crore Covishield doses; no decision on free vaccination yet, says Deputy CM

Panasonic to buy US supply-chain software firm Blue Yonder for $7.1 billion

Ind Ra revises down India's FY22 GDP growth forecast to 10.1%

Trending on CNBC-TV18

recommended for you