Jubilant Foodworks IPO opens on Monday
The PE firms are exiting the firm, which operates Domino’s Pizza chain in India, making 5x returns.
JP Morgan and India Private Equity Fund (IPEF), a joint venture between Chase Capital Partners and Oppenhiemer, who together hold 31% stake in Jubilant Foodworks, are exiting their decade-old investment with returns in the region of 5x. Jubilant Foodworks, the master franchisee that operates Domino’s Pizza chain in India, is coming with its IPO that would provide an exit route to the PE firms besides raising around Rs 55 crore for the company.
One of the few IPOs necessitated by the desire to exit by the existing PE investors will raise over Rs 306 crore, a major portion of which will be encashed by the PE investors. The IPO will make it the first restaurant chain in the country to be traded publicly. The firm had been, reportedly, looking to sell the stake but has not been able to find a buyer at the valuation it was seeking. So, it decided to go ahead with the public float.
As per VCCircle calculations, the two financial investors are hoping to pocket 4x ‘net’ return for their 10-year-old investment of around Rs 53.2 crore ($11.6 million) that was spread over three tranches (1999, 2001 and 2003). Both investors could pocket over Rs 250 crore together against the estimated investment of Rs 53.2 crore. IPEF accounts for around two thirds of the total money invested by the two financial investors.
Jubilant FoodWorks, which runs the Dominos Pizza chain in India, would list over 6.36 crore shares on the bourses at an issue price of Rs 145 a piece, the upper end of the price band. Jubilant FoodWorks also reported 50.40 per cent rise in its total income for the quarter ended December 31, 2009, at Rs 117.36 crore, as against Rs 78.03 crore during the year-ago period.
The company has already roped in several anchor investors that includes Reliance MF, SBI MF, Blackrock, Canara Robeco MF and Fidelity for a total investment of Rs 44.3 crore under its pre-IPO placement.