Shares of Barbeque Nation Ltd. dropped on market debut even as investors piled into the maiden offering of the restaurant chain, deriving optimism from last year’s IPO rush that extended into 2021.
The stock of the restaurant chain that grills chicken tikka to potatoes on the table listed at Rs 496.6 apiece on the National Stock Exchange, a discount of 0.7% to its issue price of Rs 500 apiece.
The stock then managed to pare its losses to gain as much as 2.6% to Rs 513, in the early minutes of trading.
The Rs 452.87-crore initial public offering, launched on March 24 and closed on March 26, was subscribed 5.98 times on the final day, led by the demand from institutional and retail investors. That was followed by 3.10 times and 1.02 times subscription of categories reserved by non-institutional investors and employees, respectively.
The IPO, the nineteenth so far in 2021, received bids for 5.41 crore equity shares against an offer of 90.57 lakh equity shares.
Before the IPO, Barbeque Nation had raised Rs 202 crore by allocating 40.58 lakh equity shares at Rs 500 apiece to 15 anchor investors.
Of the proceeds, Barbeque Nation will use Rs 54.6 crore as capital expenditure to expand its network of 147 namesake restaurants and Rs 75 crore towards prepayment or repayment of all or a portion of certain outstanding borrowings of the company on a consolidated basis.
The company’s business has recovered to 84.2% of the pre-pandemic level at the end of November 2020. It, however, suffered a Rs 100-crore loss during the period.
Barbeque Nation competes with listed peers such as Speciality Restaurants in the dining segment, while some of its quick-servicing rivals are Westlife Development Ltd., Jubilant Foodworks Ltd. and Burger King.