Burger King is one of the fastest growing QSR companies in India; has been growing at a 98% CAGR for 5 years with the quarter affected by Covid-19
Burger King’s stock debuted on Dalal Street today at Rs 115.35 per share, 92% higher than the issue price of Rs 59-60 per share. The stock spiked even higher at the opening bell and was seen trading at Rs 119.5 each minute thereafter. Burger King’s initial public offering was massively underwritten by investors of all categories earlier this month. Overall, the issue was subscribed 156 times, making it the second-most-subscribed IPO of 2020.
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Burger King shares rose 3.4% from the trading price shortly after the opening bell. The publicly traded company had a market capitalization of Rs 4,402 crore. Burger King, one of the fastest growing Quick Service Restaurant (QSR) chains in the country, is the national arm of Burger King, based in the United States. On the unlisted market, the leading fast food company’s shares were trading at an 83% premium over the weekend, just before its debut on the stock market.
The stock was massively subscribed by non-institutional investors, who bid for their share of the issue 354 times. Qualified institutional buyers over-subscribed their share of Burger King’s IPO 85 times, while retail investors over-subscribed their share 67 times. After issuance, the company’s promoters now have a 60.1% stake, up from 94.3% prior to issuance. Burger King’s public interest has increased to 39.9%, from 5.7% prior to issuance.
Also Read: Burger King IPO Trading Day Strategy: Sell After Trading Profit Or Hold For More Profit?
Burger King will raise Rs 450 crore from the issue, while Rs 360 crore will come from the Offer of Sale (OFS) for the company’s promoters. The QSR chain aims to use the majority of the new issuance amount to finance the launch of new restaurants, as it aims to reach the target of 700 restaurants by 2026.
Financially, Burger King’s operating income has increased from Rs 378 million in fiscal year 2017 to Rs 841 million in the previous fiscal year. EBITDA during the same period has gone from Rs 8 crore to Rs 103.9 crore. Although Burger King continued to make net losses, its highly recognized brand equity and the growth potential of the QSR industry is drawing investors to the company.
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