Speciality Restaurants IPO oversubscribed on final day

NEW DELHI: The initial public offering of Speciality Restaurants Ltd was oversubscribed 2.4 times on Friday, the third and last day of the issue. The IPO had attracted bids for 244.21 lakh shares against 99.78 lakh shares on offer until 16:00 hours.

Speciality Restaurants, known for its flagship brand Mainland China, entered the capital market with a public issue of over 11 crore shares. The company had fixed the price band of Rs 146-155 apiece.

The issue opened for subscription on May 16. The company has mopped up more than Rs 26 crore through the issue of shares to anchor investors.

Of the total proceeds of Rs 180 crore, the company plans to use Rs 131 crore to develop new restaurants. Additionally, it plans to use Rs 15 and Rs 9.4 crore to develop a food plaza and repay a term loan.

The company’s revenue increased at a CAGR of 39 percent from Rs 33.2 crore in FY06 to Rs 175.1 crore in FY11, primarily driven by new restaurants and better performance from matured restaurants.

Anand Rathi recommended investors to ‘subscribe’ to the initial public offering. The company's strong cash flows depict the strength of its brand and enables it to manage expansion plans without going in for too much of leverage, according to the Anand Rathi report.