Speciality Restaurants Limited which is tapping the capital markets with its IPO for 1,17,39,415 shares announced the price band as Rs 146-155. The issue opens on Wednesday the 16th of May and closes on Friday the 18th of May. The company would be raising Rs 171.39 crs at the lower end of the price band and Rs 181.96 crs at the top end of the price band.
The company currently operates 82 restaurants and confectioneries. Of these 82 stores, 49 restaurants are owned and operated by the company, 13 confectioneries and there are 20 franchisee owned company operated restaurants. The flagship restaurant of the group is ‘Mainland China’.
Revenues in the year ended March 2010 were Rs 129.75 crs which grew by 34.91% to Rs 175.06 crs in March 2011. In the current nine months period ended December 2011 the revenues have grown to Rs 152.11 crs and on an annualised basis to Rs 202.81 crs or 15.85%. The net profit after tax for the same period has moved up from 9.65 crs to 16.02 crs or 65.95%. In the current year the profit for nine months is Rs 15.01 crs which on an annualised basis has increased to Rs 20.02 crs or 24.97%.
The company is being compared to global fast food chain Domino’s Pizza whose master franchisee is Jubilant Foodworks Limited. This company has reported numbers for the year ended March 2012 and a quick snapshot shows that the company opened 87 new stores in Fiscal 2012 taking the total stores to 465 stores. The revenues were up 50% to Rs 1017.5 crs while Net Profit was up 47% to Rs 105.6 crs. Same store growth which is a key in retail business has grown at 29.6%. The company has also become master franchisee for Dunkin Donuts.
The shares of Speciality Restaurants based on nine months annualised EPS of Rs 4.25 are being offered at a PE multiple of 34.35 times at the lower end and 36.47 times at the upper end of the price band.
The company begins its road shows for marketing the issues from today in Mumbai and does anchor allocation on Tuesday.
The issue would be analysed over the next two days.