By Dominick Rodrigues
Mumbai : Barbeque-Nation Hospitality Limited — a leading Indian casual dining restaurant chain — announced its IPO of equity shares opening on Mar 24, 2021 and closing on March 26, 2021 at between Rs 498 and Rs 500 per equity share.
The IPO is a fresh issuance of equity shares of Rs 5 face value, aggregating up to Rs 180 cr and an offer for sale of up to 54,57,470 equity shares of face value of Rs 5 each by the selling shareholders.
The Company proposes to utilise the net proceeds from the fresh issue towards expansion and opening of new restaurants by the Company, prepayment or repayment of certain outstanding borrowings in part or in full availed by the Company on a consolidated basis and for general corporate purposes.
Replying to questions via webinar, Kayum Dhanani, Managing Director, BNHL, highlighted the ‘Barbeque Nation’ restaurant chain’s beginning with their first such restaurant opening in 2006 to reach 18 restaurants by 2012 through the efforts of their founder – who was not a +foodie+ but “loved to reach out to people’s hearts through food”.
“We need to be sensitive to local needs,” noted Dhanani while highlighting BNHL’s Lucknow restaurant experience where their struggle to attract local diners ended when they recruited local chefs familiar with the popular local cuisine.”Today, our three restaurants in Lucknow bring in total Rs 3.25 crores business,” he said.
The Barbeque Nation restaurant dining concept appealed to diners across India and led to its expansion of 164 restaurants (including 11 Italian restaurants) in 77 Indian cities, he said, adding “We started distributing our products across India and soon realized that we could open a +Barbeque Nation restaurant within every five kms radius of the country.”
“Our focus is on continuous expansion in India,” said Rahul Agrawal, CEO and Whole Time Director, BNH. “Our store growth CAGR rose to 167 in FY20 through strong guest focus culture and constant menu innovation with 47% bookings coming in through the BBQ Nation App. Our revenue was Rs 8,508 crores Fy20 and EBITDA at Rs 1680 crores Fy20. We raised equity capital of Rs ~ 1500 million in December ’20 and January ’21. Our delivery revenues were: Rs 261 million (FY20) and Rs 379 million in 8 months ended Fy21.”
While observing that the Covid pandemic affected the restaurant industry Including BNHL with many restaurants closing down, he said BNHL reopened in June 2020 with newer ideas like its pioneering “Delivery In A Box” generating around 2.2 million downloads on its App.
Emphasizing the high gap between EBITDA and PAT to being corrected over time, Agrawal said three BNHL outlets were shutdown during the pandemic due to landlord disagreements, while all its outlets – barring one – were co-owned/operated.
To a question about working through “Cloud Kitchens,” he said this was possible only if this business model made sense. “Otherwise there is no point in setting up new kitchens while having the existing infrastructure,” he pointed out, adding that while unorganized restaurants were affected due to disruption caused by the pandemic and branded restaurants, people were still choosing dining out due to social needs.
BNHL pioneered the format of ‘over the table barbeque’ concept in Indian restaurants according to the Technopak Report. The first Barbeque Nation restaurant was launched in 2006 by one of the promoters, Sayaji Hotels Limited (“SHL”).
BNHL launched its first Barbeque Nation restaurant in 2008 and subsequently acquired five restaurants owned and operated by SHL in 2012. As of December 31, 2020, BNHL currently operates 147 Barbeque Nation restaurants (including opened, temporarily closed and under construction outlets) across 77 cities in India and six international Barbeque Nation restaurants across three countries namely UAE, Oman and Malaysia.
BNHL has diversified its offering by acquiring 61.35% stake (on a fully-diluted basis) in Red Apple Kitchen Consultancy Private Limited which currently owns and operates Italian restaurants under the brand name “Toscano”, a casual dining Italian restaurant chain operating in Pune, Bengaluru and Chennai, “La Terrace” and “Collage”.
The Company has further extended its offerings by introducing UBQ by Barbeque Nation to provide a-la-carte Indian cuisine in the value segment. As of December 31, 2020, the Company was providing delivery in 77 cities in India under UBQ by Barbeque Nation from its existing kitchen infrastructure. It has also launched “Barbeque-in-a-Box” in June 2020 as one of their delivery products, — besides two other products, “Grills in a Box” and “Meals in our Box”, which are offered through delivery among other offerings.
IIFL Securities Limited, Axis Capital Limited, Ambit Capital Private Limited and SBI Capital Markets Limited are the BRLMs to the issue.
The promoters of Barbeque-Nation Hospitality Limited BNHL are: SHL, Sayaji Housekeeping Services Limited, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani. CX Partners Fund I Limited (“CX Partners”), through TPL and AAJV Investment Trust, invested in the Company in 2013. Xponentia Opportunities Fund and Jubilant Foodworks Limited invested in the Company in December 2020 and January 2021 respectively. The promoters and the promoter group hold 47.80% in BNHL and the remaining shares in BNHL are held by public shareholders.
