Burger King IPO: The company has set an issue price in the price band of Rs 59-60 per share.
Burger King India shares were in high demand on the opening day of the Initial Public Offering (IPO) on Wednesday. Burger King India’s initial public offering of Rs 810 crore, which will remain open until Friday, was oversubscribed within hours of opening. At 12:30 pm, Burger King India’s initial public offering was oversubscribed 1.45 times, according to data from the National Stock Exchange. Burger King India’s IPO received offers for more than 10 million shares compared to 7.45 million shares on offer.
The Quick Service Restaurant (QSR) chain set the issue price in the price band of Rs 59-60 per share and received offers for shares of over Rs 7.92 crore at the cut-off price.
Burger King’s IPO involves a new share issue worth Rs 450 crore and an offer to sell of Rs 360 crore by promoter QSR Asia. The company has already raised Rs 91.92 million from Amansa Investments in a pre-IPO placement, at a price of Rs 58.50 per share.
Retail offers for the public offering can be made for a minimum of one lot of 250 shares and in multiples thereafter, up to 13 lots.
“In the upper price band of Rs 60, the IPO is valued at a price / sales (P / S) ratio of 2.7 times based on fiscal year 20 sales, compared to peers like Jubilant FoodWorks (8 , 4 times) and West Life Development (4.4 times). Additionally, per store, the company’s valuation (market capitalization / total stores) is Rs 8.8 crore, compared to Jubilant FoodWorks (26, 2 crore) and Westlife (23.8 crore). The valuation seems reasonable compared to its peers, “said brokerage firm Anand Rathi in a research report.
“While the COVID-19 crisis has had an impact on short-term growth, we believe the company remains well-positioned for long-term growth, given its strong brand position, diverse food offerings, supply chain well established, aggressive expansion plans, cost management efforts and benefits of gradual recovery in the QSR industry after COVID. As such, we recommend subscribing to this IPO, “added Anand Rathi.
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