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Burger King India Fancies the Investors- IPO Oversubscribed by 155x

 

Burger King IPO  closed for subscription today on 4th Dec 2020.  The Issue continued to attract investors on the last day and has been oversubscribed by 155x.  Burger King IPO received 84.34 times bids from QIB, 354.08 times bids from NIIs and 67.19 times bids from retail category. The company has already raised Rs 364.5 crore from anchor investors on 1st Dec 2020. The issue has received bids for 1155 crore equity shares against the IPO size of 7.45 crore equity shares as per the information available with Stock exchanges. Following factors worked in favour of Burger King:

  • Increasing trend in revenue from operations seen on YoY basis.
  • National master franchisee arrangement which allows using Burger King’s globally recognised brand name. 
  • Quality and brand positioning.

Burger King is the fastest growing QSR chains in India and aims to reach 700 restaurants by Dec 2026. BK would be in a growth momentum for the next couple of years and we might see improved valuations as it break evens. CAGR of 23 % is expected from the QSR market till FY 2025. (For Valuations pls refer Full analysis Burger King IPO- Details, Review Analysis)

Burger King’s NAV is Rs 7.62 against the face value of Rs 10. P/BV is 7.87 calculated at upper band issue price of Rs 60.s However, its established peer like Jubiliant Food commands very high valuations i.e P/E @ 255.71 and P/BV @ 27.86. The industry P/E is 71.03.rger King IPO Subscription Status- Is it worth 

Discounted valuation relative to its peers like Jubiliant (Dominos) and Westlife (Mc D). This coupled with the growth phase of the industry and the issuer played a driving factor for the investors to subscribe to the IPO. Listing gains cannot be ruled out looking at the subscription numbers.

The Burger King IPO GMP has been trading around 40-50% at Rs 25-30 and has zoomed to Rs 35 on 4th Dec 2020.

Subscription Status

Subscription Status (no. of times,x)    
ParticularsNumber of Shares Offered2nd Dec 20203rd Dec 20204th Dec 2020
QIB4.04 crore0.16x2.71x84.34x
NII2.05 crore0.70x3.60x354.08x
Retail1.36 crore15.54x37.8067.19x
Total7.45 crore3.13x9.37x155.22x

Burger King IPO Important dates

Burger King IPO Allotment and Listing 
Basis of Allotment9th Dec 2020
Refunds10th Dec 2020
Credit to Demat Account11th Dec 2020
Listing Date14th Dec 2020

 

ICICI Direct, Angel Broking, Choice Equity Broking, Geojit Capital, Capital Market and KR Choksey had given a subscribe to the IPO.

 

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About CA Priyanka Choudhary Jain 98 Articles
Chartered Accountant & an experienced credit analyst. She has worked with CRISIL as a Senior Credit Analyst on rating assignments including business & financial analysis in Corporates as well as the Public Finance Sector. Please mail your queries, feedback, and any suggestions to her on info.financepost@gmail.com

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