Rakesh Jhunjhunwala’s Alchemy Capital has decided against promoting its stake in Barbeque Nation by means of an Offer for Sale (OFS) as the restaurant chain when once more plans to go public. In the second addendum, filed by Barbeque Nation with capital markets regulator SEBI earlier this month, the enterprise has trimmed the OFS size and announced that it has undertaken a pre-IPO placement, lowering the quantity of shares investors can bid by means of the IPO, when it hits Dalal Street. Barbeque Nation has been attempting to get listed on the bourses because 2017 but its plans have so far not fructified.
Rakesh Jhunjhunwala decides to remain invested
Earlier, prior to the coronavirus pandemic, Barbeque Nation had planned to raise Rs 275 crore by means of a fresh situation of equity shares whilst current investors had been promoting 98,22,947 equity shares. In the addendum filed with SEBI, Barbeque Nation now plans to raise Rs 180 crore by means of the fresh situation and current shareholders are searching to sell just 54,57,470 equity shares. Kayum Dhanani, Zoya Dhanani, Pace Private Limited and Alchemy India Long Term Fund Limited have decided to withdraw as promoting shareholders from the provide. Promoter SHKSL has decided to raise the quantity of equity shares in the provide for sale. Rakesh Jhunjhunwala’s Alchemy Capital had earlier planned to sell 3 lakh equity shares.
Marquee names stroll in pre-IPO
The addendum informed that Barbeque Nation has undertaken a pre-IPO placement of 59,51,132 equity shares for an aggregate quantity equal to around Rs 149.9 crore. Done in a variety of transactions, all the pre-IPO placements had been preferential allotments issued at Rs 252 per share. This has helped Barbeque Nation rope in crucial investors into the firm.
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“Xponentia and CX partners recently picked 6.2% stake while Jubilant Foodworks picked up 10.8% stake in Barbeque Nation,” Divam Sharma, Co-founder at SEBI Regd Portfolio Management Services told TheSpuzz Online. “This is highly positive for the company as names like Jubilant brings in lots of strategic value to the company. The pre-IPO placement has resulted in the reduction of the fresh issue size,” he added. The Decision by investors to not exit by means of the OFS, indicates that they are searching to make bigger gains by continuing to remain invested, according to Divam Sharma.
Debt repayment tactic changed
Barbeque Nation has also changed its provide objective in the addendum. Now, the restaurant chain is searching to raise Rs 54.6 for expansion and opening of new restaurants and Rs 75 crore for pre-payment or re-payment of debt. Barbeque Nation could now be searching to trim its debt additional in the future against an instant repayment, according to Amarjeet Maurya – AVP – Mid Caps, Angel Broking.
Barbeque Nation compares properly with its presently listed peers. “Jubilant FoodWorks is trading at an ROE of 25%, Westlife LifeDevelopment is making an REO of 3-4% based on the Financial year 2019 numbers while Burger King is in the negative,” mentioned Amarjeet Maurya. According to his calculations, Barbeque Nation’s ROE based on monetary year 2019 numbers stood at 11%. “I think Barbeque Nation could get good valuations and listing, seeing the response Burger King’s IPO got earlier,” he added.