The Bengaluru based hospitality group, Barbeque Nation plans a fresh issue of INR 180 crore to expand its chain of restaurants and repay debt and an offer for sale up to INR 273 crore.
Issue Highlights:
Date – 24th – 26th March 2021
Lot Size – 30 shares
Issue Size – Upto INR 453 crore
Price Band – INR 498 – INR 500 per share
The company currently operates 164 restaurants across 77 cities in India. The average bill size rose INR 3,249 from INR 3,026 between FY18 and FY20. To overcome disruption in the sales due owing to the lockdown the company started a food delivery service called Barbeque in a Box.
The company’s revenue grew to INR 850 crore by FY20 while the net losses rose to INR 32.9 crore from INR 5.8 crore between FY18 and FY20. The company was reporting losses even before the lockdown was imposed only because of the capital intensive nature of the business.
In FY20 the expenses were 80 per cent of the total revenue. Also, on an average, it takes almost 3 years for a restaurant to break even, which can be further stretched considering the uncertainty that surrounds us on account of the COVID-19 pandemic.
It will be better for the investors to wait and see the company's performance over a few quarters and the impact of new guidelines imposed due to the surge in COVID-19 cases on the fine dining business segment.Disclaimer: The view/s expressed above are only for educational/awareness purpose. Mumbailive.com or the author of the post bears no liability for any losses suffered by following any advice posted on the website. You are solely responsible for making your own investment decisions.
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