India's Barbeque-Nation reverses course after weak opening on debut, jumps 18%
Shares of restaurant chain Barbeque-Nation Hospitality recovered early losses to rise 18% in their debut trading on Wednesday, helped by a rally in broader Indian markets on the central bank's decision to stand pat on key interest rates.
The Bengaluru-based casual dining restaurant chain, which offers unlimited barbecue buffets, raised about 4.53 billion rupees ($61.62 million) through an initial public offering (IPO).
Shares of Barbeque-Nation, which also operates the high-end Toscano eatery chain, opened at 489.85 rupees, below the offer price of 500 rupees. Stock recovered to trade up 17.6% after dropping as much as 3.6% in early session.
"The IPO did not have major demand during subscription in March as the company has been incurring losses in last three fiscal years, and overall, this isn't a good time for the whole restaurant sector due to a rise in coronavirus cases," Saurabh Joshi, an equity research analyst at Marwari Shares and Finance Ltd said.
"The recovery in shares was purely because the overall market was positive," he added.
The NSE Nifty 50 Index was up 0.93%, as of 0814 GMT, and the S&P BSE Sensex rose 0.95%, after the Reserve Bank of India kept interest rates at record lows but committed to a massive government bond purchase programme.
Barbeque-Nation's debut comes as a resurgence in coronavirus infections in India threatens to derail a nascent recovery in business for restaurants, malls and movie theaters. The chain competes with Mainland China and Oh! Calcutta-owner Speciality Restaurants in the fine dining space.
While Barbeque Nation's offering was oversubscribed about six times last month, it pales in comparison with the interest generated by some other listings this year including paint maker Indigo Paints Ltd, which was 50 times oversubscribed, and engineering firm MTAR Technologies Ltd, which was oversubscribed more than 100 times.
The restaurant chain, which has 138 outlets in India, had posted a net loss of 987.2 million rupees for the eight months ended November 2020, and an annual loss of 323.9 million for the year ended March 2020.