Speciality IPO is unique, says Chatterjee but what about valuation?

The valuation for the company IPO across the price band seems to give a price of 34-36.5 times earnings. That could seem expensive for many.

Speciality IPO, launched by the owners of popular fine dining brand Mainland China, has opened today with a price band of Rs 146-155 per share. Even before the IPO has opened for the public, Speciality raised Rs 26.41 crore from anchor investors by allotting around 17.6 lakh shares at Rs 150 per share.

The anchor investor includes Morgan Stanley, SBI Magnum Global Fund, Reliance Equity Opportunities Fund and HSBC India Alpha (Mauritius) Limited. Each fund has been allocated 3.5 lakh shares.

Speciality has a total of 69 restaurants under brands like ‘Mainland China’, ‘Oh! Calcutta’, ‘Sigree’, ‘Machaan’ and 13 confectionery stores called ‘Sweet Bengal’. The IPO will offer 1.7 crore shares, which means there will be a dilution of 25 percent of the post-issue, paid-up capital, raising around Rs 180-200 crore.

But the market has not been kind to recent IPOs.Seven public offers have hit the markets since November, but barring MT Educare, most of the other stock listings are trading well below their issue prices. A recent IPO of ?Samvardhana Motherson Finance had to be withdrawn following a dull response, despite successful roadshows prior to the issue.

So will investors be investing in this one? Anjan Chatterjee, managing director, Speciality IPO, said “Within our own sphere I think we have a unique story, and we have been building this over a period of last 20 years, so we are going ahead with the IPO.”

The company is a play on the consumption theme and Chatterjee said, “Going forward, considering the fact that fine dining is in a nascent stage, there is a huge opportunity that we are seeing in both tier 1 and tier 2 cities. We would be sure that the more number of Mainland Chinas we add we are actually adding to the bottom-line and the profits.”

The valuation for the company IPO across the price band seems to give a price of 34-36.5 times earnings. That could seem expensive for investors who might wait for the stock to be listed and invest at lower price in the secondary market.

Till 1.00 pm, 80 shares have been bid for in the BSE.