Speciality Restaurants IPO Review

MAS - Speciality Restaurants

Speciality Restaurants is coming out with its IPO plans to raise about Rs 171-181 crore and this issue is open for subscription from May 16 to May 18. Speciality Restaurants is the owner of restaurant brands such as Mainland China, Sigree, Machaan and Oh!Calcutta among others.

The company plans to use the proceeds of IPO for developing new restaurants and partial repayment of debt. About 80 per cent of the proceeds (Rs 131 crore) would be used for the development of 45 new restaurants.
 
Issue Details:

Issue Open: May 16, 2012 – May 18, 2012.
Issue Size: 11,739,415 Equity Shares of Rs. 10.
Issue Price: Rs. 146 – Rs. 155 Per Equity Share.
Market Lot: 40 Shares.
Listing At: BSE, NSE.

Fundamentals:

For the fiscal Years 2010 and 2011 the company  reported an EPS of  3.92 and 5.48 respectively .  For the full year 2012, the EPS could be around Rs.4.25 and at the upper band, the IPO is done at 36 times the 2012 earnings. The book value of the company stands at Rs.32 for the reported year 2011 and the issue is being done at 5 times the book value. The company is growing at 30% and considering the appetite for such companies in food industries segment, the issue is worth  looking at. The only deterrent is the weak market condition and over pricing of the issue, in such market conditions. The company might do well post-listing, if not immediately.

Could be another Jubilant Foods ? Let’s wait and watch.

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2 Comments on “Speciality Restaurants IPO Review”

  1. Hi, you are calculating EPS based on pre-issue equity shares, after the issue, the EPS for FY 2012 would be around 4.3, givign it a P/E of 35.

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