After serving scrumptious food to the country, Barbeque Nation Hospitality has now been approved to serve a lucrative IPO to investors. Securities and Exchange Board of India (SEBI) has given its approval to Barbeque to raise about Rs 1,000-1,200 crore through an IPO. According to the draft papers filed with SEBI, the IPO comprises a fresh issue of shares as well as offer-for-sale.
Details of the Barbeque IPO Issue Objects
- A fresh issue of shares – Rs 275 crores
- Offer-for-sale – 98,22,947 equity shares face value of ₹5 each
- The IPO is listed at Mumbai NSE.
Barbeque’s Objective to IPO Issue
The proceeds of the offer will be utilized to pay off the borrowing of Rs.205 crores. In the meantime, selling shareholders will be entitled to their respective portion of the proceeds of the offer for sale, after deducting their portion of the offer related expenses and relevant taxes thereon. As per the DRHP, the company will not receive any proceeds from Offer-for-Sale.
Promoters with 60.24% stake in the firm
Promoters – Sayaji Hotels Ltd, Sayaji Housekeeping Services Ltd, Kayum Dhanani, Raoof Dhanani, Suchitra Dhanani, and some promoters’ groups
Managed by following Book Running Lead Managers (BRLMs)
BRLMs – SBI Capital Markets, IIFL Securities, Axis Capital, Ambit Capital, SBI Capital Markets.
Allocation of the IPO
Up to 50% of the IPO – Qualified institutional buyers (QIBs)
15% – Non-institutional bidders
35% – Retail individual bidders
In consultation with the Book Running Lead Managers and Tamara Private Limited (TPL), Bengaluru-based Barbeque Nation Hospitality may consider a pre-IPO placement of up to Rs.150 Crores at a price to be decided by the company. It has obtained observations from the SEBI on July 7, 2020.
CX Partners which has invested in the company in 2013 and 2015 holds a 33.79% stake while the investment firm Alchemy Capital, owned by renowned stock market investor Rakesh Jhunjhunwala’s, owes 2.05% in the company. One should consider the internal risk factors stated in Draft Red Herring Prospectus of Barbeque.
Recently, the company has acquired a 61.35% stake in Red Apple Kitchen. With 138 restaurants in 73 cities of India and 7 outlets in the UAE, Oman, and Malaysia, Barbeque Nation Hospitality claims to be the largest player in India in the organised dining space. The first Barbeque Nation Restaurant was opened by Sayaji Hotels Ltd, one of the promoters of the IPO issue.
How the IPO will work
Before an Initial Public Offering (IPO), a company is considered private. An IPO is a process through which a private company issues its shares to the public to raise capital from public investors. This is the transition period for a private company. A company selects underwriters, an exchange in which its shares will be issued and traded later. An IPO has been a buzzword for investors as it includes share premiums.
A market regulator approves a private company IPO only when it believes it is mature enough for the rigors of the responsibilities to public shareholders.
Barbeque had applied twice for IPO to raise ₹700 crore and finally got the approval from market regulator SEBI this time.
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