Burger King India’s 810 Crore IPO, Know important things before investing

IPO Market: Burger King’s IPO is going to open on Wednesday, December 2. Burger King plans to raise Rs 810 crore through an IPO. In addition to its business expansion, the company will use this fund to repay debt. The price band of the company’s IPO has been fixed at Rs 59-60 per share. Burger King’s IPO will open on December 2 and will close on December 4. The company has set aside 10 per cent of the IPO for retail investors. At the same time, 15 percent will be reserved for non-institutional investors. While 75 percent of the rest will go to qualified institutional investors. If the performance of the IPO market has been better so far this year, should we invest in the Burger King IPO?

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What is the expert’s opinion on investment?

Regarding the IPO of this company, the brokerage says that the issue price is attractive, at which it can be subscribed. Brokerage houses Angel Broking and Prabhudas Leeladhar have advised investing in Burger King.

Brokerage house Angel Broking says Jubilant Foodworks, a Pier Company of Burger King, is currently trading at 8.7 EV / sales on a FY20 basis. It can be said that Burger King is not at a premium valuation like its peer company. At the same time, its profitability track record is also not like Jubilant. It will be important to see how the company’s business grows ahead. Still the issue price is attractive, which can be subscribed.

Brokerage house Prabhudas Leeladhar has also suggested to subscribe to the IPO of Burger King. According to the brokerage, the company has opened 260 stores in 5 years. At the same time, there are plans to open 700 stores by 2026. The company is well capitalized, so it seems to be getting advanced. Anyway, Burger King plans to expand its business from the funds received from the IPO. In such a situation, better business growth is seen. He will get the advantage of being less competitive in this field. However, there will be pressure on the company’s financials in the near term. In the first half of FY 2021, the company had a loss of 118 crores. However a turnaround is expected by FY23 / 24.

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Note these things before investing

• The price band of the company’s IPO has been fixed at Rs 59-60 per share. The lot size of Burger King’s IPO will be 250 shares. Investors will have to buy at least one lot share. That is, at least 15000 rupees have to be applied.

• Burger King IPO has a fresh issue of Rs 450 crore. Apart from this, the promoter of the company QSR Asia will sell its 6 crore shares, the value of which will be Rs 360 crore according to the upper price band.

• The company has raised Rs 364.5 crore from anchor investors on Tuesday before the IPO. The company said in the BSE circular that its board has approved allocation of 6,07,50,000 equity shares to anchor investors at Rs 60 per share. In this way, the company has raised Rs 364.5 crore from them.

• The company will use this fund from the IPO to open new stores and repay debt.

• Kotak Mahindra Capital Company Limited, CLSA India Private Limited, Edelweiss Financial Services Limited and JM Financial Limited are the lead managers of the issue. Link Intime India Limited is the registrar company of Burger King IPO and will look after the allocation and refund.

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• The allocation of shares of Burger King may be final till 9 December. Its listing is expected by December 14 by 2021.

• The company opened its first restaurant in India in November 2014. Today Burger King has 268 stores in 57 cities across the country. Out of these, there are 8 franchises which are at airports.

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