Jubiliant Food Works Opens its IPO on 18 January 2010

The much awaited Initial Public Offering of Jubilant Foodworks that runs the fast food retail chain under the Dominos pizza brand in India has been issued in public’s interest with their real interest of getting capital funding.

As the company expects to raise up to Rs 329 crore, that’s why the price band of the initial public offer (IPO), has been fixed between Rs 135 to Rs 145 per equity share.

The issue will last on January 20. Jubilant Foodworks is expected to hit the capital market with an issue size of 2.26 crore with equity shares of Rs 10 each. The offer is valued worth Rs 328.72 crore, at the upper end of price band.

Sudeep Bandyopadhyay, Group President, Finance, Spice Group said, “Jubilant Foodworks IPO would be an interesting case to watch as it represents the growing fastfood business in India, Retail investors will look at rightly priced IPOs. The credibility of the promoter group and the pricing of the issue are the two most critical factors”.

Reliance MF, SBI MF, Blackrock, Canara Robeco MF and Fidelity are the roped investors as the retailing IPO starter expects a total investment of Rs 44.3 crore under its pre-IPO placement.

The IPO comprises a fresh issue of 40 lakh equity shares and an offer for sale of 1.86 crore shares by India Pvt Equity Fund (Mauritius) and Indocean Pizza Holding.

Conservative investors can avoid subscribing to the initial public offer of Jubilant Foodworks (JFL), the operator of the national pizza chain, Domino’s Pizza. Though the business has managed strong growth rates so far, the asking price for the offer is stiff.

Talking about the positives, Recently renewed, the franchise agreement, it will continue for another 15 years. JFL currently operates 286 outlets, across a geography of 59 cities. JFL plans to open about 15 more outlets by end-FY10, and is required to open at least 25 stores a year after that per its agreement.

A good portion of new stores are slated for smaller towns and cities where demand is beginning to take off as income levels and spending habits pick up.

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