The initial public offering (IPO) of quick service restaurant chain (QSR) Burger King India Ltd will open on December 2 for three days. The price band for the IPO has been set at Rs 59-60 per share.
Burger King aims to raise Rs 810 crore through the issue, which comprises a new issue of shares worth Rs 450 crore, and an offer to sell of up to 60 million shares by the promoting entity QSR Asia Pte Ltd worth Rs 360 crore, on the higher end. from the price band.
The company intends to use the new proceeds to fund the launch of new company-owned Burger King restaurants and to serve general corporate purposes.
The company has reserved up to 10% of the initial public offering for retail investors, up to 15% for non-institutional investors, and up to 75% for qualified institutional investors. Offers can be made for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter.
The initial sale of shares is being managed by Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial. It is proposed that the company’s shares are listed on the BSE and the NSE.
About the company
Burger King was the fastest growing international QSR chain in India for the first five years of its operations, based on the number of restaurants. Their master franchise agreement gives them the ability to use Burger King’s globally recognized brand to grow their business in India. The Burger King brand is the second largest fast food hamburger brand globally, based on total number of restaurants, with a global network of more than 18,000 restaurants in more than 100 countries and US territories, as of 30 June 2019.
As of September 2020, the company has 261 restaurants, including eight sub-franchised Burger King restaurants in 17 states and union territories and 57 cities across India, according to the appendix.
Assessment and recommendation
Burger King is growing rapidly in India. The company’s revenue increased from Rs 230 crore in fiscal year 2017 to Rs. 633 crore in fiscal year 2019. On the other hand, the company has reduced its losses from Rs. 72 crore to Rs 38 crore from FY17 to FY19.
According to Angel Broking’s Associate Equity Analyst Keshav Lahoti, “Burger King’s counterpart Jubilant Foodworks is currently trading at 8.7 EV / Sales in fiscal 2020. We believe Burger King will not be as highly valued as Jubilant Foodworks, as it does not have a profitable track record like Jubilant, its establishments are young and we believe that most Indians prefer Jubilant – Pizza to the hamburger that Burger King sells. “
Dear reader,
Business Standard has always strived to provide up-to-date information and comments on developments that are of interest to you and that have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our determination and commitment to these ideals. Even during these difficult times arising from Covid-19, we remain committed to keeping you informed and up-to-date with credible news, authoritative opinions, and incisive commentary on relevant current affairs.
However, we have a request.
As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you more quality content. Our subscription model has received an encouraging response from many of you, who have subscribed to our content online. Increased subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital editor
.
