With an IPO on its plate, Barbeque Nation hopes to clear off some of its debt and double down on not just dining but its new delivery business

With an IPO on its plate, Barbeque Nation hopes to clear off some of its debt and double down on not just dining but its new delivery business
A Barbeque Nation oulet in Pune. The company is looking to raise ₹180 crore from fresh issue of shares and an offer for sale up to 54.5 lakh shares. Barbeque Nation
  • Barbeque Nation is looking to raise ₹180 crore from the public markets by selling 54.5 lakh shares.
  • As of November 2020, the company’s net debt was ₹148 crore.
  • In an interview with Business Insider ahead of the IPO, the company’s chief executive officer Rahul Agrawal shares how Barbeque Nation survived the COVID-19 pandemic, its new delivery business and their growth plans.
Indian casual dining chain Barbeque Nation Hospitality has finally made its way to the public markets, after a failed attempt at it over three years ago. The company, which operates the Indian restaurant chain Barbeque Nation and Italian chain Toscano, is looking to raise ₹180 crore from fresh issue of shares and an offer for sale up to 54.5 lakh shares.

Issue opensMarch 24
Issue closesMarch 26
Price band₹498-500 per share
Market lot30 shares
Minimum order value₹15,000

In an interview with Business Insider ahead of the IPO, the company’s chief executive officer Rahul Agrawal shares how Barbeque Nation survived the COVID-19 pandemic, its new delivery business and their growth plans.

Agrawal said that they have been ‘unlucky with the way they filed the IPO’. “We filed our papers in February 2020, and COVID-19 happened right after that,” he said.
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The company, which had initially got an approval to raise ₹1100 crore, has now cut it short drastically to ₹180 crore. The company hopes to raise ₹453 crore at the upper end of the price band. “Later on, some investors weren’t keen to exit, that's why the IPO size got reduced. We also raised a pre-IPO round that’s how the primary component came down,” said Agrawal.

Barbeque Nation in a pre-IPO round raised ₹150 crore from Xponentia Capital, founded by private equity veteran Ajay Relan, and Jubilant Foodworks, the parent company of Domino’s Pizza in India. It is also backed by CX Capital, a PE firm, and Alchemy Capital, the investment firm headed by ace stock market expert Rakesh Jhunjhunwala.

“We are raising ₹180 crore, of which ₹75 crore will go in repayment of debt, ₹55 crore will go for expansion, and the balance will be for general corporate expenses,” he said.
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As of November 2020, the company’s net debt was ₹148 crore.

Surviving COVID-19



With the COVID-19 pandemic and the subsequent nationwide lockdown, Barbeque Nation saw its business being completely shut in April and May, last year.
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“Frankly, lockdown was extremely challenging. We have over 160 outlets, 8000 people, the business had some debt, which still hasn’t been repaid. I don't think anything could have gone worse,” said Agrawal.

But the team was swift to jump into precautionary measures. “We were very transparent to all our stakeholders – from employees to guests. The team also went ahead and started asking for rebates, renegotiating contracts etc.,” he said.

During the pandemic, Barbeque Nation managed to save 98% of its outlets. “Once the lockdown happened, we went back to our landlord partners and asked them for assistance in terms of rental waivers given the fact that it was no business time. We are happy to say that we were able to save 98% of our stores. Unfortunately, three outlets, which were at high rental places, two in Mumbai and one in Delhi had to shut down,” Kushal Budhia, head of strategy and investor relations of Barbeque Nation told Business Insider.
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While in April and May there was barely any business, eventually, the growth started from June and by November, their business was at 84% of last year’s November numbers.

With an IPO on its plate, Barbeque Nation hopes to clear off some of its debt and double down on not just dining but its new delivery business
BI India

Diving into a new business category



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As COVID-19 pandemic made the transition to online inevitable for all companies, Barbeque Nation, which is famous for its dine-in business, jumped into the online delivery model. The company launched a new concept of ‘Barbeque in a box’ for delivery. “The delivery business has seen good response and is growing – it does digital numbers as a proportion of revenue,” said Agrawal.

“Barbeque Nation stands for value for money, service and experience. The last two components you can’t replicate in a delivery business. We thought of it differently – the largest market size is for Indian cuisine. Our thesis is very simple: the market is there, delivery is going higher. We said that don’t confuse us with giving the same experience of Barbeque Nation at home. Instead, they have been ordering Indian food, so we carried forward our value and variety concept,” he said.

Ready for troubled times ahead



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As Barbeque Nation opens its doors to the public markets, there’s also the fear of another nationwide lockdown, while several cities are already subject to lockdown or night curfew. But Agrawal said that while there may be a short term disruption in business, their long term vision to grow in the Indian restaurant industry remains intact.

“This will be the nature of the business going forward for at least a couple of quarters – different states will have different restrictions. In the short term, you would see business disruption. We believe that we have already gone through a strict lockdown in the past, and survived it and that will help us sail through this,” he said.

As things stabilise, the company also plans to get back to its expansion plans, having gone from 80 restaurants in FY17 to over 160 restaurants now. “We will also focus majorly on the new delivery vertical,” said Agrawal.

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