Business

Burger King India Shares Make Stellar Debut, More than 100% Rise Minutes after Listing

Earlier, on 2 December 2020, the company’s IPO was oversubscribed within a few hours of subscription opening

The issue price was ₹60 per share.

Burger King India Debut Share Price Soars High

On Monday (14 December 2020), Burger King India Ltd witnessed a stellar stock exchange debut. Shares jumped more than 100% after its ₹810 crore initial public offering was subscribed more than 157 times last week.

On BSE, the stock opened at ₹115.35 and touched a high of ₹138.40 per share. At 12:40 pm, the rate was at ₹133.70, up by 122.42% from its issue price of ₹60.

Burger King India Share Price Graph
Burger King India Share Price Graph

Burger King’s Plans

Throughout India, Burger King operates 268 stores. The company had fixed the price band of its IPO at ₹59-60 a share. It was open for subscription during 2-4 December 2020. Burger King India plans to open around 700 restaurants, which includes company outlets as well as sub franchise entities, by 31 December 2026.

Subscription

IPO portion reserved for retail investors was subscribed 68.79 times. The portion set for qualified institutional investors was subscribed 86.48 times. High net worth investors subscribed 357.45 times.

Valuation

Burger King’s IPO proceeds are seen at ₹450 crore which it plans to use to repay debt and for expansions. Also, the company had raised ₹364.5 crore from anchor investors.

Company IPO, at an upper price band of ₹60, is valued at a price to sales ratio of 2.7 times based on sales of fiscal 2020. As a comparison, its peer Jubilant Food Works Ltd has a price to sales ratio of 8.4 times, according to analysts.

Moreover, on a per-store basis, the company’s valuation (market cap/total stores) stands at ₹8.8 crore. Jubilant Food Works’ is at ₹26.2 crore.

Stock Broker Anand Rathi Services’ Words

In a recent report, renowned Indian Stock Broker Anand Rathi Services mentioned:

“The valuation (of Burger King) 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 quick service restaurant industry post COVID-19.”

Burger King Store
Burger King Store

Revenue

The company had reported revenue of ₹135.20 crore until September 2020. For fiscal 2020, it reported revenue of ₹841.20 crore. However, the company is yet to report a net profit. Even then, it has been able to record decent gross margin, earnings before interest and a positive operating cash flow, prior to Covid-19.

Stock Advisors of Burger King

Advisors of the company on the IPO include Kotak Mahindra Capital, Edelweiss, CLSA and JM Financial.

For live price, visit: https://www.bseindia.com/stock-share-price/burger-king-india-ltd/burgerking/543248/.

Chiranshu Walia

Chiranshu Walia is an IT guy who takes care of all the technical aspects of the website. He also has a keen interest in writing, especially in the entertainment category. He loves to experiment and a risk-taker, which makes him an extraordinary element of Trendy Bapu.

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