News recently broke out that Barbeque Nation, a leading casual dining chain in the country is listing its IPO both on the NSE as well as the BSE on the 7th of April 2021.
Investors already have the declaration that Barbeque Nation’s IPO is a weak listing since the grey market premium of its unlisted shares took a major tumble, down to Rupees 10.
The IPO coming from Barbeque Nation is the first of its kind for the financial year 2021-22 which has baffled investors. Mainly because food services have been most impacted due to low customer spending. Even five-star restaurant chains turned into start-ups and had to start from scratch. Casual dining is equivalent to fine dining among Indian customers and Barbeque Nation’s move is being viewed as bizarre since they are also planning to open 5-6 more outlets soon.
What’s interesting to note is that in the Grey Market, the ‘Grey Market Premium’ (GMP) shares of Barbeque Nation went from Rupees 40 to between 10-12 Rupees in the span of just one week.
The reason for the fall in the GMP shares of Barbeque Nation is obviously the coronavirus wave riding high once again in India which is leading to numerous lockdowns and curfews being imposed. Another reason is the volatility in the equity market.
The last day of the Barbeque Nation IPO, the 26th of March saw a subscription count of 5.98. Investors can now view their allotment status.
The IPO is valued at INR Cr 453 and retail investors are the majority backers. Also, the IPO is fully subscribed as of date.
There are clear risks for investors purchasing stake in Barbeque Nation’s IPO. The restaurant industry is already burdened with covid restrictions which has given rise to a sense of ruthlessness among competing businesses to survive the disruption.
Share purchase guidelines:
The minimum lot size for purchase of Barbeque Nation’s shares was 30. A typical investor would need to pay a price of INR 15,000 to bid for a single lot in Barbeque Nation’s IPO. If it’s a retail investor, you are allowed to apply for a maximum of 13 share lots for a price of INR 195000.
Barbeque Nation’s debut in shares is much awaited no doubt by the firm itself, but mostly by investors. But investors sure are indecisive regarding the right course of action for the IPO listing.
Covid has ruined a good many things but looks like Barbeque Nation’s grand debut will be rocked by imposed restrictions.
Investors will be up for a dull listing which in a way was already predicted. Barbeque Nation is a restaurant chain in the hospitality sector, one of the most affected industries since the onset of the pandemic.
Is it risky for you as an investor?
There are clear risks for investors purchasing stake in Barbeque Nation’s IPO. The restaurant industry is already burdened with covid restrictions which has given rise to a sense of ruthlessness among competing businesses to survive the disruption. The bottom line is that you can either ‘avoid’ the issue or ‘apply at your own risk’.
What’s in it for me?
The Restaurants and Hospitality sector is currently going through tough times and this listing comes at an ill-advised time. As an investor, it’s advised to not be focused on only listing gains with the Barbeque Nation IPO. This is because investors looking for short-term gains are likely to see their hopes shattered.
If you are an investor who trusts the long-term potential of the Restaurants and Food Services sector, it’s advised to ‘hold’ instead of ‘sell’ your shares.
Barbeque Nation going public is a big story in the food services sector currently because what they are doing is unheard of. It seems like a do or die situation and investors are rightly in a dilemma. A lot of companies who earlier moved to IPO had to suddenly shut down.
It’s great that Barbeque Nation decided to go public, but the timing is certainly off.