CRISIL assigns grade 4/5 to Speciality Restaurants IPO

CRISIL has assigned a grade of 4/5 to the proposed IPO of Speciality Restaurants, which indicates that the fundamentals of the IPO are above average relative to the other listed equity securities in India, according to research report dated June 15.

Speciality Restaurants is one of the leading fine-dining restaurant operators in India. Besides its flagship brand Mainland China, the company operates a chain of restaurants under various brands like Oh! Calcutta, Machaan, Sigree, Flame & Grill and Haka. The company also operates a confectionery brand, Sweet Bengal, in Mumbai. As of December 31, 2010 the company operates 62 restaurants and 11 confectionaries under 11 brands in 17 Indian cities and one in Dhaka, Bangladesh. Of the 62 restaurants, 17 are under the franchise owned and company operated model and the rest is owned and operated by the company.

The IPO proceeds will be utilised to finance the development of new restaurants and a food plaza, repayment of term loan facility and general corporate purposes.

The report says, "The assigned grade factors in favourable industry prospects of the food services industry given the favourable demographic profile and the rising base of working class in India, which are expected to provide impetus to the restaurant business. Also, increasing urbanisation, a growing middle class population and rising disposable income in India are leading to an increase in dining out as a lifestyle choice."

"The grade reflects Speciality

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