InvestorQ : What is your view on the forthcoming IPO of Burger King?
Rutuja Nigam made post

What is your view on the forthcoming IPO of Burger King?

8 months ago

Burger King is classified as a quick service restaurant or QSR in the international context. The announcement has been made that the IPO of Burger King India will open on December 2 and will remain open for a period of 3 days. The price band for the Burger King IPO has been fixed at Rs 59-60 per share.

Overall, Burger King will look to raise Rs.810 crore through the issue. This issue has two components. It comprises a fresh issue of shares worth Rs.450 crore and an offer for sale or OFS of Rs.360 crore. The total issue of Rs.810 crore is at the upper end of the bank. Burger King will use the funds to fund the roll-out of new company-owned Burger King restaurant.

The company has reserved 10% of the IPO for retail investors, 15% for non-institutional HNI investors and the balance 75% for qualified institutional investors. Bids can be made for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter. The shares will be listed on the BSE and the NSE.

Burger King is a globally recognised brand and the second largest fast food burger brand globally with a global network of 18,000 restaurants in over 100 countries. In India alone, the company has 261 restaurants, including eight sub-franchised Burger King Restaurants.

Between FY17 and FY19, the total revenues of Burger King grew from Rs.230 crore to Rs.633 crore. It has also reduced its losses from Rs.72 crore to Rs.38 crore over last two years. While Jubilant gets a valuation on EV/Sales basis of 8.7 times, Burger may have to settle for lower valuations. However, it does offer a good way to participate in the food franchise.