Mumbai: Private equity firm CX Partners-backed casual dining restaurant chain Barbeque Nation Hospitality Ltd has raised ₹ 80-90 crore in a pre-IPO placement from Alchemy Capital Management, an investment firm co-founded by ace stock market investor Rakesh Jhunjhunwala, said two people aware of the development.
Bengaluru-headquartered Barbeque Nation had filed its draft IPO (initial public offering) papers with the Securities and Exchange Board of India (Sebi) in August 2017. The company is expected to raise ₹ 700 crore through the public offer. The proposed IPO received Sebi’s nod in January 2018.
“Alchemy Capital has picked up a minority stake in Barbeque Nation through Alchemy India Fund for a consideration of around ₹ 80-90 crore. The pre-IPO placement valued the company at ₹ 2,300-2,400 crore," said one of the people cited above, requesting anonymity. The capital will be used to build new restaurants and for repayment of debt, he added.
Emails sent to Barbeque-Nation and Alchemy Capital did not elicit any response till the time of going to press.
Barbeque-Nation is promoted by entities such as Sayaji Hotels, Sayaji Housekeeping Services Ltd and members of the Dhanani family. The first Barbeque-Nation restaurant was launched in 2005. In 2013, CX Partners, had invested in the restaurant chain. Alchemy Capital was set up in 1999.
As of 30 June 2017, the company operated 81 restaurants across 42 cities in India, and one in Dubai. In 2016-17, the restaurant chain reported revenue of ₹ 489.4 crore, ₹ 399.8 crore in the previous fiscal. The company’s profit was at ₹ 15.8 crore, compared with ₹ 12.5 crore during the period under consideration, according to data from the company’s draft prospectus.
Several IPO-bound companies have raised funds in pre-IPO placements in the recent times. On Monday, Mint reported that shrimp exporter Nekkanti Sea Foods Ltd has raised $30 million (₹205 crore) in a pre-IPO investment round.
The pre-IPO investment saw participation from Motilal Oswal and other prominent public markets investors such as New Horizon Investments, White Oak Capital and Madhusudan Kela.
White Oak Capital is an alternative asset manager founded by Prashant Khemka, former chief investment officer for Goldman Sachs Global Emerging Markets fund and India fund.
New Horizon Investments is managed by Madhav Bhatkuly. Kela, a renowned investor in the Indian stock market, was formerly chief investment strategist of Reliance Capital.
Last year, Indian companies had raised about $600 million in pre-IPO rounds, Mint had reported in November.
The activity was led by large deals such as the $383 million pre-IPO round by a consortium of investors led by Warburg Pincus in ICICI Lombard General Insurance Co. Ltd, and IIFL Special Opportunities Fund’s $60 million bet on Reliance Nippon Life Asset Management Co. Ltd.
Pre-IPO fundraising also witnessed the participation from investors such as hedge funds, family offices and high net-worth individuals. In September, IPO-bound Prataap Snacks Ltd had raised Rs50 crore in a pre-IPO round from public market investor Malabar Investments. In the following month, private equity firms Aditya Birla Private Equity and Multiples Alternate Asset Management sold part of their stakes in IPO-bound Indian Energy Exchange Ltd to several high net-worth individuals and SBI Life Insurance Co. Ltd days before the company’s public float.