JUBILANT FOODWORKS IPO ANALYSIS : DOMINO'S PIZZA

JUBILANT FOODWORKS has come up with an Initial Public offer (IPO). It's planning to raise around Rs 328 crore. They have kept price band of Rs 135-145 per share. IPO closes on 20th January.


Should you subscribe?

- For pizza lovers it's good to invest in the company where they ideally pay money to their own company by visiting Domino's Pizza. Apart from that I don't see any benefit out of the company.

- I would advise retail investors not to carry away with the current IPO trend where Investors have made quick money on the listing day. There's no point of investing in all the IPO's.


Reason:
- Most of the raised money is going to be paid to Promoters. There's not major expansion plan for the company using our money.

- Domino's Pizza is having 286 stores around different cities. By giving current valuation and money they are raising, value for per outlet comes around 3 crore rupees. It seems to be really expensive when you get it for Rs 50 Lacs.

- There's lot of competition in the market from US Pizza and other local players. I personally prefer US Pizza over Domino's due to service and variety.

- At current IPO price company is trading at around P/E multiple of 35, which looks really expensive for me.

Positive:

- Jubilant Foodworks IPO is first of its kind in Indian stock markets. We don't have any previous data about peers to compare. It may deserve some premium.

Take your own call after reading this article.

Happy Investing !!