KUNVARJI - IPO COVERAGE REPORT_Barbeque Nation Flipbook PDF

KUNVARJI - IPO COVERAGE REPORT_Barbeque Nation

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IPO NOTE: Barbeque Nation Hospitality Limited Highlights: Incorporated in 2006, Barbeque Nation Restaurants is one of the leading casual dining restaurant chains in India. Barbeque Nation Restaurants typically offer customers at least five vegetarian and five non-vegetarian largely pre-cooked appetisers they can season and barbeque on a grill embedded in their table, an all can eat main course buffet and a selection of desserts, for a fixed price. The company has internal algorithms to forecast demands based on past trends. On general basis company is providing extensive training to all employees on the Company’s core values, behavioural and technical competencies, which helps in increasing the value of the company towards the employees. Barbeque Nation Hospitality, owns and operates Barbeque Nation restaurants. It also operates Toscano restaurants and UBQ by Barbeque Nation Restaurant. The pricing policy of Barbeque Nation Hospitality Limited is generally based on the costs of operation and raw materials, marketing analysis, including analysis of customer needs and our competitive position. As of on Dec,2020, company have 164 restaurants owned and operated by us which includes 147 Barbeque Nation Restaurants (including opened, temporarily closed and under construction outlets) across 77 cities in India, six International Barbeque Nation Restaurants across four cities outside India and 11 Italian Restaurants across three metro cities in India of which nine are operated under the brand name “Toscano” and one each under the brand names “La Terrace” and “Collage”, respectively.

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Company Information Sector

Consumer food

IPO Opens date IPO Closes date Issue type

Book Built Issue IPO

IPO Size (aggregating)

Objective of issue:

Price band

The net proceeds from the fresh issue will be utilised towards capital expenditure for expansion and opening of new restaurants by the company.

Market Lot Face value Finalisation of allotment* IPO Listing date* Listing on

Financial highlights: - Company has reported incremental growth in revenue from operations by 15 percent in FY20 at Rs. 846.97 Crore on (Y-o-Y), and 26 percent in FY19 stood at Rs. 739.02 Crore. - Stable EBITDA growth has been reported by company with a growth of 12.5 percent on (Y-o-Y) basis at Rs. 168.04 Crore in FY20 and 6.42 percent for FY19 period at Rs. 149.39 Crore. - Company has delivered net loss during current financial year as on Nov’20 at Rs. (100.65) crore, we believe the business was significantly impacted due to COVID-19, which led to our restaurants being temporarily closed from the third week of March 2020, therefore impacted overall sales and volume. - Company has reported de-growth in Net Working Capital (% of total revenue) at (15.75) percent, (14.23) percent, (16.22) percent, (87.20) percent for the period of FY2018, FY2019, FY2020 and Nov 30,2020. - Company has reported negative growth in EPS at Rs. (2.51), (14.45), (11.77) and (35.96) for period of FY18, FY19, FY20 and eight months of 2020 respectively. - Company has reported stable standalone same stores sales growth (SSSG) and the store margins for mature stores and new stores for Barbeque Nation Restaurants for the FY2018, 2019 and 2020 at 21.6 percent, 20.3 percent, 17.00 percent respectively.

24-March-2021 26-March-2021 Rs. 452.0-453.0 Crore Rs. 498-500 P/share 30 & in multiple 5.00 01-April-2021 07-April-2021 NSE, BSE

Outlook: Subscribe for Long term. In out view, As company has faced hurdle in sales volume growth per store during current financial year on the back of pandemic and partial lockdown concerns. However, company has set target to increase sales volume by introducing new innovative dishes and different types of foods based on different food festivals. We believe Barbeque Nation Hospitality Limited can improve their operational activity by way of diversifying their product offerings along with sale of alcoholic beverages in our Barbeque Nation Restaurants, however company will face strong competition from other listed reputed brands such as jubilant foodworks,westlife development ltd, speciality restaurants ltd and Burger king india ltd etc. The Barbeque Nation Hospitality Limited has reported EPS at Rs. (11.76), Rs.(35.96) and of FY20 and Nov-20(8M) respectively, Valuing IPO at higher valuations Vs expectations in EPS terms at upper band. So, We recommend to SUBSCRIBE this issue for long term horizon only.

Key Strengths

Issue break-up

Customer oriented and team-focused culture and business values. Continue evaluating to create innovative different product line. Strong IT system and centralised cloud based reservation and feedback management system. Particulars Equity share capital Revenue from operations Total Income EBITDA EBITDA margin PAT Net working capital Networth(Rs.) Net Debt (Rs.) Total debt to Equity ratio Total debt to EBITDA Net debt to Equity ratio

FY-18

FY-19

FY-20

In (Cr.) Nov-20(8M)

QIB NIB Retail Employee Total

Promotor/Investor % of Issue ~75% ~15% ~10% 100%

No. of shares (Rs. Crore) ~338.16 ~67.63 ~45.09 ~2.0 ~452.87

OFS detail (Shares) 10,18 Lakh 3,39 Lakh 3,39 Lakh 3,39 Lakh 33,23 Lakh 71,186 26,600 Post-Issue 37.79% 62.21%

(5.80)

(38.39)

(32.93)

(100.65)

(92.98)

(105.66)

(138.06)

(206.32)

144.99

131.63

5.92

(14.92)

Sayaji Housekeeping Services Ltd Azhar Dhanani Sadiya Dhanani Sanya Dhanani Tamara Private Ltd Aajv Investment Trust Menu Private Ltd Pre-Issue 47.80% Promoter 52.20% Public

84.03

145.88

230.23

239.31

Issue Manager

0.88

1.20

41.41

(16.55)

0.91

1.06

1.46

19.62

BRLMS

Axis Capital, IIFL Securities, Ambit Capital, SBI Capital Markets

0.58

1.11

38.92

(16.04)

Registar

Link Intime India Pvt. Ltd.

13.80

14.00

14.00

14.00

586.34

739.02

846.97

201.00

590.45

742.54

850.80

236.61

140.37

149.39

168.04

12.59

23.77%

20.12%

19.75%

5.32%

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