Burger King’s stock began trading at Rs 115 against an offer price of Rs 60.
Burger King India Ltd. rose 131% on its first day of trading, the latest successful debut after a series of tech company listings helped fuel the initial share sale.
The Burger King-branded restaurant operator in India saw demand nearly 157 times the number of shares in its initial public offering earlier this month. With restaurants open after closing and vaccines on the way, investors are betting that Indians will soon flock to fast food chains.
The stock began trading at 115 rupees against a bid price of 60 rupees and rose to a high of 138.40 rupees at the close of business at 3:30 pm in Mumbai. The debut is the best since 2017 when Astron Paper & Board Mill Ltd. was up 142%.
Key ideas
- The company’s franchise agreement with Restaurant Brands International Inc. allows it to use the Burger King brand in India until December 31, 2039.
- The deal also requires Burger King India to open at least 700 restaurants by the end of 2025.
- The 4% to 5% royalty paid to Burger King is less than the range paid by franchisees of most comparable quick-service restaurants in India, according to the company’s prospectus.
- “We advise long-term investors to continue investing in the company,” said Keshav Lahoti, an equity analyst at Angel Broking in Mumbai. expects the company to gain market share by opening more stores compared to the competition “
- In the first half of the fiscal year ending in March, revenue declined 68% year-on-year and the company reported losses due to the impact of Covid-19, according to Hemang Jani, chief equity strategist at Motilal Oswal Financial Services Ltd.
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- Burger King India’s IPO marks a widening of the wave of debuts in late 2020, which had become increasingly dominated by tech companies.
- Rival Jubilant Foodworks Ltd. has seen revenue continue to erode in the quarter ending in September, but not as badly as when India was under lockdown.
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