Barbeque Nation Brings On-The-Table Grill Experience To India4 min read
Barbeque Nation Hospitality, one of India’s leading casual dining restaurant chains, is all set to debut on capital markets.
The company opened its first restaurant in Mumbai in 2006 and is now present in 77 Indian cities. Barbeque Nation Hospitality opens around 20-23 outlets every year and is one of the fastest-growing Indian cuisine restaurant chains.
Barbeque Nation Hospitality was the first company to bring the live on-the-table grills concept to India. The idea was conceived when it came to the notice that starters would end up getting cold on the table as guests would engage in small talk.
Barbeque Nation has steadily grown its network from a single restaurant to 147 Barbeque Nation Restaurants (including opened, temporarily closed, and under construction outlets) across 77 cities in India and six International Barbeque Nation Restaurants in three countries outside India as of December 31, 2020.
In November 2018, they launched UBQ by Barbeque Nation Restaurant to provide a la carte Indian cuisine in the value segment. At present, UBQ by Barbeque Nation Restaurant predominantly caters to the delivery segment.
Through their Barbeque Nation Restaurants, they pioneered the format of the “over the table barbeque” concept in Indian restaurants, according to the Technopak Report. UBQ by Barbeque Nation provides a la carte Indian cuisine in the value segment, initially through leading food delivery service providers for the delivery of their food.
They diversified into another brand pursuant to their acquisition of 61.35% of the equity share capital on a fully diluted basis of Red Apple, which operates 11 Italian Restaurants in three cities in India, namely Bengaluru, Chennai, and Pune.
Barbeque Nation Hospitality owns 61.35% of the equity share capital on a fully diluted basis of one of their Subsidiaries, Red Apple, which owns and operates nine restaurants under the brand name, “Toscano”, a casual dining Italian restaurant chain, and operates one restaurant each under the brand names “La Terrace” and “Collage” respectively.
Their acquisition of Red Apple has enabled them to diversify their brand, cuisine, and customer segment beyond their flagship concept of “over the table barbeque”.
As of December 31, 2020, UBQ was providing delivery in 77 cities in India of a la carte Indian cuisine under UBQ by Barbeque Nation from their existing kitchen infrastructure.
Impact of Covid-19
As a result of COVID-19, the company has had to temporarily close a number of restaurants across India commencing from March 2020 and has experienced reduced store-level operations, including reduced operating hours and restaurant closures.
During the initial stage of the COVID-19 crisis, footfalls and sales in Barbeque Nation Hospitality restaurants fell significantly due to the lockdown and other measures implemented by the Government of India. The footfalls and sales have since started to recover, although not yet to levels they saw prior to the COVID-19 crisis.
As of date, Barbeque Nation restaurants in 77 cities across India have reopened, out of which the majority have opened for dine-in guests; however, the capacity may be limited, based on local regulations.
The reduction in the level of business activity due to the COVID-19 crisis has also led to write-offs of food inventory and a reduction in orders with their suppliers since the inventory included food items that are perishable in nature.
The company’s sales have recovered month on month post lockdown given the easing of various supply-side restrictions.
The recovery of their monthly sales has been driven both by an increase in dine-in sales and delivery sales. Delivery business has increased from 3% to 15% in Nov 2020.
Company Financials
Barbeque Nation Hospitality’s revenue from operations in FY20 was Rs.846.97 crore as against Rs. 739.02 crores in FY 19 which reflect a year-on-year growth of nearly 15%. Let’s look at the company’s other financial data in the table below:
IPO Details
Barbeque Nation Hospitality IPO opens for subscription on March 24 and closes on March 26. The shares will be offered in a price band of Rs.498 to Rs. 500 with a lot size of 30 shares. The company is offering 9,057,470 – 9,071,927 shares in its IPO and aims to raise an issue amount of Rs 452 – Rs 453 crores.
The company will use IPO proceedings for capital expenditure for expansion and opening of new restaurants, prepayment or repayment of all or a portion of certain outstanding borrowings availed by the company on a consolidated basis and for general corporate purposes
Strengths & Risks
Strengths
● Barbeque Nation is one of India’s fastest-growing and widely recognised restaurant brands in the rapidly growing casual dining restaurant market
● Attractive offerings based on constant menu innovation and customer focus
● Experienced staff and value-oriented business culture led by some of their Promoters and their senior management team bringing experience from well-known hospitality brands
Risks
● The COVID-19 pandemic has had a substantial impact on restaurant operations.
● Deterioration in the performance of, or the company’s relationships with, third-party delivery aggregators, may adversely affect business.
● If Barbeque Nation Hospitality’s new restaurants are not profitable or perform as planned and could also adversely impact sales in their existing restaurants
Conclusion
The IPO of Barbeque Nation Hospitality, one of India’s leading casual dining restaurant chains, will open on Wednesday, March 24, and closes on Friday, March 26. The shares will be offered in a price band of Rs.498 to Rs. 500 with a lot size of 30 shares. The company aims to raise the issue amount of Rs 452 – Rs 453 crores.
Disclaimer – This content is purely for informational purpose and in no way an advice or recommendation
