Burger King India IPO: The Rs 810 crore initial public offering (IPO) of fast-food quick service restaurant (QSR) major Burger King India opens today and will be available for subscription till Friday, December 4, 2020. The price band of the Indian subsidiary of the US-based fast-food giant has been fixed at Rs 59-60 per share.
Investors wishing to subscribe to Burger King India’s IPO can bid in a lot of 250 equity shares and multiples thereafter. At the upper price band, they will shell out Rs 15,000 to get a single lot of Burger King India. The shares will be listed on both BSE and the National Stock Exchange (NSE).
The IPO comprises of a fresh issue of shares amounting to Rs 450 crore. Promoter entity QSR Asia Pte Ltd will sell up to 6 crore shares, aggregating to Rs 360 crore at the upper end of the price band.
The company has reserved up to 10 per cent portion of IPO for retail investors, up to 15 per cent for non-institutional investors and up to 75 per cent for qualified institutional investors.
Kotak Mahindra Capital, CLSA India, Edelweiss Financial Services and JM Financial are the lead managers to the Burger King India IPO while Link Intime India is the registrar to the issue.
The funds raised will mainly be utilised for the expansion of company-owned stores across the country and paying off debts. At present, Burger King has a strong presence in the north, followed by the west, south and eastern parts of the country.
Geojit Financial Services and Anand Rathi Share and Stock Brokers in their respective research notes have recommended “Subscribe” to the offer.
“At upper price band of ₹60, the IPO is valued at Price to Sales (P/S) ratio of 2.7x based on FY20 sales, compared to peers like Jubilant FoodWorks Ltd. (8.4x) and West Life Development Ltd. (4.4x). Also, on per store basis, the company’s valuation (Market Cap/total stores) stands at ₹8.8 crores, compared to Jubilant FoodWorks (₹26.2 crores) and Westlife (₹23.8 crores). The valuation seems reasonable when compared to peers. While the COVID-19 crisis have impacted short term growth, we believe the company remains well placed for long term growth, given its strong brand position, diverse food offerings, well established supply chain, aggressive expansion plans, cost management efforts and benefit from the gradual recovery in the QSR industry post COVID. As such, we recommend Subscribe to this IPO” Anand Rathi Research wrote in its report.
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