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Restaurateur set to dish out shares

Calcutta, March 14: Speciality Restaurants Pvt Ltd (SRPL), the owner of Mainland China and Oh! Calcutta, is going public, making it the second established food chain after Jubilant Foodworks to tap the capital market.

The company, promoted by Bengali entrepreneur and master chef Anjan Chatterjee and wife Suchhanda, is likely to raise Rs 200-220 crore through the IPO, valuing SRPL at Rs 800-900 crore.

SRPL, which has its head office in Calcutta, plans to use the funds to build 48 new restaurants in the next two years and construct a world-class food plaza in Rajarhat, Calcutta. It will also retire some debt by using the proceeds from the issue. If and when the IPO goes through, it will be the second company owned and promoted by a Bengali entrepreneur to hit the capital market in recent times after Ess Dee Aluminium of Sudeep Dutta.

Chatterjee entered the out-of-home fine dining industry in 1994 with a Mainland China restaurant before donning a corporate identity in 1999.

Today SRPL operates 62 restaurants and 11 confectioneries across the country. Apart from the 29 Mainland China restaurants, which contribute 60.44 per cent to the company’s revenue, Oh! Calcutta is the other core brand. SRPL also operates Haka, Sigree, Flame & Grill, Machaan, confectionery Sweet Bengal and coffee snacks bar Italian Café.

The company posted a revenue of Rs 129.8 crore and a net profit of Rs 10.99 crore in the year ended March 31, 2010, registering a 40.61 per cent and a 36.63 per cent compounded annual growth rate, respectively. It has posted a turnover of Rs 80.74 crore and a profit of Rs 9.26 crore in the six months ended September 30, 2010.

The market will be keenly watching how the promoters price the issue. Jubilant Foodworks, the only peer company in the listed space, commands a healthy price earning multiple compared with the BSE sensex.

Jubilant has also been a star performer after listing, gaining more than four times in one year, but the stock was priced modestly during the IPO.

The SRPL promoters will hold a 60.69 per cent stake post issue, down from 80.92 per cent. Two investors, equity fund SAIF Partners and corporate investor Glix Securities, will hold 10.64 and 3.67 per cent stakes, respectively, after the issue. None of the existing investors are selling shares now.

The draft red herring prospectus was submitted to Sebi last Friday.

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