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Birdy's (Grill Splendour Services Limited) IPO Review




Birdy's Grill Services Limited IPO Review


 

In the bustling city of Mumbai, a culinary venture was born out of a passion for gastronomy and a vision to offer an exquisite experience to food enthusiasts. Birdy's Grill Splendour Services Limited, a name that has become synonymous with gourmet bakeries and patisseries, began its journey in November 2019. The company was established to expand its reach in the hospitality industry, and it did so by acquiring Birdy's Bakery and Patisserie from WAH Restaurants Private Limited.

 

The Rao and Sood families are the driving forces behind Birdy's Grill Splendour Services Limited. Srinidhi V Rao, Vandana Srinidhi Rao, and Vivek Vijaykumar Sood are the promoters who share a common vision of providing a unique and delightful culinary experience. Their combined expertise and dedication have steered the company towards remarkable growth and success.

 

The inception of Birdy's Grill Splendour Services Limited was driven by the desire to create a brand that stands for quality, innovation, and customer satisfaction. The founders saw an opportunity to fill a gap in the market for high-end baked goods and patisserie items that could cater to the discerning tastes of Mumbai's populace. Their goal was to establish a chain that not only serves delicious treats but also provides a memorable experience for its patrons.

 

Since its establishment, Birdy's Grill Splendour Services Limited has seen exponential growth. The company's commitment to excellence and customer-centric approach has earned it a loyal customer base and several corporate clients. In April 2024, Birdy's took a significant step forward by announcing its Initial Public Offering (IPO), marking a new chapter in its story of growth and expansion.

 

Birdy's Grill Splendour Services Limited stands as a beacon of culinary excellence, a testament to the power of passion, and a symbol of the entrepreneurial spirit. Its journey from a single outlet to a renowned chain, and now to a publicly-listed entity, is an inspiring tale for aspiring entrepreneurs and food lovers.




Competitive Strengths


Birdy's Grill Splendour Services Limited, a burgeoning name in the hospitality industry, has carved out a niche for itself with its distinctive approach to gourmet bakery and patisserie services. Established in November 2019, Birdy's has rapidly expanded its footprint in Mumbai, boasting 17 retail outlets, a central manufacturing facility, and a robust portfolio of corporate clients.


The company's competitive strengths are multifaceted, reflecting a strategic blend of brand recognition, market presence, management expertise, and customer relationships. Here's a detailed exploration of these core competencies:

 

Revenue, Sales, and Profit




Grill Splendour Services Limited, operating under the brand name Birdy's, is a notable entity in the hospitality sector, particularly known for its chain of gourmet bakeries and patisseries in Mumbai. Established in November 2019, the company has shown a remarkable growth trajectory. For the financial year ending March 31, 2023, Birdy's reported a substantial increase in revenue by 32.92% compared to the previous year. This surge in revenue is a testament to the company's expanding footprint and its ability to attract and retain customers. In terms of profit, the company's performance is even more impressive, with the profit after tax (PAT) skyrocketing by 5654.34% between the financial years ending March 31, 2022, and March 31, 2023. Such a dramatic rise in profitability indicates effective cost management and operational efficiency.

 

The financial figures speak volumes about the company's robust business model and strategic market positioning. The revenue from operations stood at Rs. 8.25 crore, Rs. 11.50 crore, and Rs. 15.29 crore for the fiscal years 2021, 2022, and 2023, respectively. This consistent upward trend in revenue highlights Birdy's ability to scale its operations while maintaining a steady flow of income. The profit after tax followed a similar upward trajectory, with the company recording a PAT of Rs. 0.03 crore in 2022 and a significant jump to Rs. 1.99 crore in 2023. Such financial health not only reflects the company's profitability but also its potential for sustainable growth.

 

The company's initial public offering (IPO), which opened for subscription on April 15, 2024 (Today), aimed to raise Rs. 16.47 crores through a fresh issue of 13.73 lakh shares. Priced at ₹120 per share, the IPO underscores the company's valuation and the confidence of its leadership in its prospects.


Distribution Network and Geographical Reach


Birdy's Grill Splendour Services Limited, established in November 2019, operates a chain of gourmet bakeries and patisseries in Mumbai. The company has expanded its presence through 17 retail outlets, a central manufacturing facility, and a network of corporate clients. The retail strategy includes a mix of company-owned and franchisee-owned stores, with 12 owned by the company and 5 operating under the franchisee model. This hybrid approach allows for a wider distribution network and geographical reach within the region. Additionally, the central manufacturing facility supports the retail outlets by ensuring consistent quality and supply of products across all locations. Birdy's Grill Splendour Services Limited's commitment to expanding its reach is evident in its strategic placement of outlets and centralized production, catering to a diverse clientele in Mumbai.


Unique Features


Birdy's Grill Splendour Services Limited, established in November 2019, is a distinguished chain of gourmet bakeries and patisseries based in Mumbai. The company's unique features include a diverse product portfolio, which encompasses traditional baked goods as well as made-to-order items, catering to a wide range of customer preferences. After acquiring Birdy's Bakery and Patisserie from WAH Restaurants Private Limited, Grill Splendour Services expanded its reach in the hospitality industry, enhancing its offerings and customer experience. The company has also revamped more than half of its stores, integrating amenities such as seating, music ambiance, table service, and a free library to attract dine-in customers. Additionally, it maintains strong B2B relationships, ensuring repeat business and sustained growth. Financially, the company has shown a progressive increase in revenue over the years, with a notable jump in profits from 2022 to 2023.


Investment in Research and Development


Birdy's Grill Splendour Services Limited, established in November 2019, is a gourmet bakery and patisserie chain based in Mumbai. The company, which operates under the brand name Birdy's, has made significant strides in expanding its reach within the hospitality industry. This expansion was facilitated by the acquisition of Birdy's Bakery and Patisserie from WAH Restaurants Private Limited in November 2019. Following the acquisition, the company has focused on growing the brand and increasing its presence in the market. As part of its growth strategy, Birdy's Grill Splendour Services Limited has invested in research and development to innovate and improve its product offerings, ensuring they meet the high standards expected by their clientele. The details of the specific investments in R&D are not publicly disclosed. Still, such investments are crucial for maintaining the quality and uniqueness of their gourmet products, which range from artisan bread to custom cakes and pastries. The company's commitment to R&D likely plays a significant role in its business strategy, especially as it seeks to differentiate itself in a competitive market. The recent IPO launch, with a fresh issue of shares aggregating up to ₹16.47 Cr, indicates the company's intent to further invest in its growth and development.




Birdy's (Grill Splendour) Services Limited IPO Details


  • Issue Date: The Issue Date in an Initial Public Offering (IPO) refers to the specific day when a company's shares are first made available for public purchase on the stock market. This date is a critical milestone in the IPO process, marking the transition of a company from private to public status and allowing investors to buy shares directly from the company for the first time. (Issue Date: April 15, 2024 to April 18, 2024).

  • Listing Date: The listing date refers to the day when the company's shares are officially listed and begin trading on a stock exchange. This is typically several business days (3-6 days) after the issue date after processes like share allotment and finalization are completed. On this date, investors who were allotted shares during the IPO can begin selling them, and new investors can start purchasing them on the exchange at the prevailing market price. (Listing Date: Tuesday, April 23, 2024).

  • Face Value of Shares: The face value of shares in an Initial Public Offering (IPO) refers to the original cost of the shares as determined by the company going public. It represents the nominal value and is often set at a lower figure, such as Rs. 10 or Rs. 100, which remains constant irrespective of the market price of the share after the company is listed on the stock exchange. When a company launches an IPO, the shares are typically offered at a price that includes this face value plus an additional premium, which reflects the current market valuation of the company. The premium over the face value is determined by the company's financial performance and future growth prospects as assessed by the investment bankers managing the IPO. (Face Value: ₹10 per share).

  • Price Band: A price band of an IPO is the range of prices within which the investors can bid for the shares of a company that is going public. The price band is set by the issuer and the lead managers of the IPO, based on various factors such as the demand and supply of the shares, the financial performance and valuation of the company, and the market conditions. (IPO Price: ₹120 per share).

  • Lot Size: In the context of an Initial Public Offering (IPO), the term "lot size" refers to a fixed number of shares that the issuing company sets as the minimum quantity that investors can apply for. This lot size is predetermined before the IPO and is mentioned in the application forms. The lot size varies from one company to another and is an important factor for investors to consider when applying for an IPO. (Lot Size: 1200 Shares).

  • Total Issue Size: The total issue size represents the total number of shares the company is offering to raise capital through the IPO. This number is determined by the company and its advisors, considering factors like their funding needs and the expected investor demand. The total issue size is then divided by the lot size to determine the total number of lots available for purchase by investors. (Total Issue Size: 1,372,800 shares (aggregating up to ₹16.47 Cr)).

  • Fresh Issue: A Fresh Issue in the context of an Initial Public Offering (IPO) refers to the creation and sale of new shares by a company to the public. Unlike an Offer for Sale, where existing shareholders sell their shares, a Fresh Issue results in the generation of new capital for the company. This capital is typically used for growth initiatives such as expansion, research and development, or debt repayment. (Fresh Issue: 1,372,800 shares (aggregating up to ₹16.47 Cr)).

  • Issue Type: The type of an IPO can vary depending on the market and regulatory conditions. Some of the common types of IPOs are, Fixed priced IPO, Auction IPO, Book Building IPO, and Hybrid IPO. (Issue Type: Fixed Price Issue IPO).

  • Listing At: An integral part of the IPO process is the listing. This refers to the day the company's shares officially begin trading on a stock exchange, such as the National Stock Exchange (NSE) or the Bombay Stock Exchange (BSE) in India. Once listed, anyone with a brokerage account can buy and sell the company's shares on the exchange. (Listing at: NSE SME).

  • Retail Shares Offered: Retail shares offered in an IPO refer to the portion of shares that are specifically allocated for individual investors, as opposed to institutional investors. These shares are part of the public offering where companies going public aim to raise capital by selling shares. Retail investors are typically allocated a certain percentage of the total shares available for the IPO. The allotment process for retail investors is designed to be fair and transparent, ensuring that all investors have an equal chance of receiving shares based on their application and market conditions. (Retail Shares Offered: 50% of the Net Issue).

  • Other Shares Offered: In an Initial Public Offering (IPO), a private company offers various types of shares to the public to raise capital. The two primary types of offerings in an IPO are Fixed Price Offering and Book Building Offering. In a Fixed Price Offering, the company sets a specific price for the shares, and investors know the exact price before they buy. On the other hand, a Book Building Offering involves a price range, and investors bid within this range. The final price is determined after considering all bids. Additionally, companies may allocate shares to different categories of investors, such as Retail Individual Investors (RIIs), Qualified Institutional Investors (QIIs), Non-Institutional Investors (NIIs), or High Networth Individuals (HNIs), and sometimes even employees as part of an Employee Stock Ownership Plan (ESOP). Each type of share offering and investor category has its own set of rules and allocation percentages during an IPO. (Other Shares Offered: 50% of the Net Issue).


Competitors of Birdy's Grill Splendour Services Limited


Birdy's Grill Splendour Services Limited, a renowned chain of gourmet bakeries and patisseries based in Mumbai, has made a significant mark in the hospitality industry since its inception in November 2019. With a network of 17 retail stores, a centralized production facility, and a robust clientele, Birdy's has positioned itself as a key player in the market. However, the landscape of the food and hospitality sector is highly competitive, with several major players vying for market share.


One of the primary competitors of Birdy's Grill Splendour Services Limited is Westlife Foodworld Limited, a company that operates a chain of quick-service restaurants in India and has a strong presence in the market. Another notable competitor is Sapphire Foods India Limited, which is known for its extensive portfolio of restaurants and has a significant footprint across the country. Additionally, Jubilant Foodworks Limited stands as a formidable competitor, with its vast network of outlets and a diverse range of food offerings.


These competitors are distinguished by their scale, variety of offerings, and market penetration. Westlife Foodworld Limited, for instance, has been expanding its reach through strategic location selection and innovative menu options. Sapphire Foods India Limited leverages its strong brand presence and customer loyalty to maintain its position in the market. Jubilant Foodworks Limited, on the other hand, focuses on delivering quality food and service, which has earned it a loyal customer base.


The competition in the gourmet bakery and patisserie segment is further intensified by the evolving consumer preferences and the increasing demand for high-quality, artisanal products. Birdy's Grill Splendour Services Limited, with its focus on gourmet baked goods and pastries, caters to a niche market that appreciates the finer aspects of bakery products. However, to stay ahead in the competition, Birdy's must continuously innovate and adapt to changing consumer trends while maintaining the quality and uniqueness of its offerings.


Birdy's Grill Splendour Services Limited faces stiff competition from established players like Westlife Foodworld Limited, Sapphire Foods India Limited, and Jubilant Foodworks Limited. The company's success will depend on its ability to differentiate itself through product quality, customer experience, and strategic market positioning. As the food and hospitality industry continues to grow, Birdy's will need to remain agile and responsive to the dynamic market conditions to sustain its growth and market share.


Conclusion


In conclusion, Birdy's Grill Splendour Services Limited's IPO presents a mixed bag for potential investors. The company's financial trajectory shows a promising start with increased revenue and profitability, yet there are concerns over the sustainability of this growth, as evidenced by the recent dip in revenue and the decrease in return on net worth. The IPO, set at a fixed price of INR 120 per share, aims to fund expansion and debt repayment, reflecting the company's ambition for growth. However, investors should weigh the aggressive pricing against the company's financials and market position. With the IPO opening on April 15, 2024, and closing on April 18, 2024, those interested should conduct thorough due diligence, keeping in mind the company's performance and the broader market conditions.


Disclaimer: This is not an investment advisory. The article above is for information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please consider your specific investment requirements, risk tolerance, goal, time frame, risk and reward balance, and the cost associated with the investment before choosing securities, that suit your needs. The performance and returns of any equity stock can neither be predicted nor guaranteed.


FAQs


Q: What is an IPO?

An Initial Public Offering (IPO) is a process through which a privately held company offers its shares to the public for the first time and becomes a publicly traded company.

 

Q: How can I apply for an IPO?

You can apply for an IPO through various methods:


ASBA (Application Supported by Blocked Amount): In this method, your application money remains in your bank account until the basis of allotment is finalized.

UPI (Unified Payment Interface): You can authorize the blocking of funds in your bank account using UPI while applying for an IPO.


Q: What is ASBA?

ASBA stands for Application Supported by Blocked Amount. It allows your application money to be blocked in your bank account during the IPO bidding process. You continue to receive interest on the blocked amount.


Q: What is the difference between book building and a normal public issue?

Book building is a process where demand for securities is elicited and the price is assessed based on investor bids. In a normal public issue, the price is fixed by the issuer.


Q: Can I make payments through UPI for IPOs?

Yes, you can use UPI as a payment method for IPOs. The UPI platform blocks the funds for IPO applications after you approve the fund block mandate request.


Q: What is the minimum order quantity for an IPO?

The minimum number of shares you can apply for in an IPO is known as the minimum order quantity. It varies for each IPO.


Q: What is the cut-off price in an IPO?

The cut-off price is the price at which you bid for shares without specifying a particular price. It allows you to participate in the IPO without specifying a specific bid price.


Q: Can I revise my bids during the IPO process?

Yes, you can revise your bids multiple times before the IPO bidding period ends.


Q: Which banks offer the ASBA facility for IPOs?

Several banks, known as Self Certified Syndicate Banks (SCSBs), offer the ASBA facility. Some examples include HDFC Bank, ICICI Bank, Axis Bank, and SBI.


Q: How do I find IPO mandates on UPI apps?

You can check the list of UPI handles supported for IPO payments on the National Payments Corporation of India (NPCI) website. These handles allow you to apply for IPOs using UPI.








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