Tag: Burger King IPO

Burger King gains 8%; CEO Rajeev Varman says will hit 700 restaurants by Dec 2026

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Burger King India rose as much as 8 percent in early trading on Thursday on the BSE. Rajeev Varman, CEO, Burger King India told CNBC-TV18 that the company is back on its construction targets and will complete 50 restaurants this year.

“Our target is to build another 70 restaurants and more in the following year and continue building in that fashion. Therefore, our target remains to get to 700 restaurants and we should hit that by December 2026,” he said.

The multinational chain of fast-food restaurants has started building cafes inside restaurants and has received a good initial response.

Read More: Back on construction targets, will complete 50 restaurants this year: Burger King India

“Recovery on the delivery side has been very good. We have reported 165 percent increase in the last quarter over pre-Covid numbers. We are doing significantly higher numbers in delivery. As far as Dine-in is concerned, it’s slowly coming back. We reported 65 percent recovery in the Dine-in business in Q2,” Varman added.

Burger King India had last month reported a net loss of Rs 20.2 crore for the quarter ended September as against a net loss of Rs 38.5 crore in the year-ago quarter.

The quick-service restaurant (QSR) company, however, reported a 154 percent year-on-year (YoY) rise in revenues to Rs 245.4 crore in the September quarter.

At 12:30 pm, shares of Burger King India was trading at Rs 162.30 apiece, 9.75 points higher, or up 6.39 percent.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

No buyers for Burger King India shares; more profit-booking ahead likely, say analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of quick-service restaurant chain Burger King India were locked at a lower circuit of 10 percent on Monday as investors continued to book profit on the stock after a sharp surge in prices post its listing.

At close of trade, Burger King India shares ended at Rs 150.15 apiece on the NSE, down 10 percent. The counter was overwhelmed with a total of 6,98,451 pending sell orders.

Interestingly, the counter recorded a total volume of 1.45 crore shares of which 1.08 crore or 74.15 percent are marked for delivery trades. Of the last 12 trading sessions, the stock has fallen in 9 sessions while it gained marginally in the remaining three.

Burger King India’s stock price has corrected over 42 percent from an all-time high of Rs 213.80. However, even after such a huge correction, the stock is still offering 150 percent return from its issue price of Rs 60 per share.

The company had made a stellar debut on the bourses on December 14, 2020, when the share was listed at Rs 112.50 apiece, an 87.50 percent premium over the issue price.

Read here: Burger King’s ‘Whopper’ listing: Stock debuts at Rs 112.5 apiece on NSE, an 87.5% premium

The Rs 810 crore-initial public offering (IPO) of Burger King India had received an overwhelming response and was subscribed 156.65 times. It received over 1,100 crore bids compared to 7.45 crore shares on offer.

Analysts are of the view that the stock price may continue to witness profit booking in the short term and it may correct more from the current level as anchor investors’ 30-day lock-in period from the date of allotment is over.

However, experts are optimistic about the long-term prospects of the company and believe it deliver better performance going ahead.

“Looking at the current run rate, we believe management will be able to achieve the target of 700 stores by Dec’26. As the store count will increase, operating leverage will kick in and the company will report better margins,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking.

Lahoti believes there is ample scope available for the company to increase its business in India.

“The long term prospects of the company are promising,” he added.

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Burger King hits 10% lower circuit for 2nd day; No impact on listing of Mrs Bector’s Food, say analysts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Burger King India shares hit a 10 percent lower circuit for the second consecutive day in a row. The stock price of the quick-service restaurant chain was locked at Rs 161.45 per share on BSE, due to profit booking.

On Thursday, the stock had slipped 10 percent to Rs 175 per share on the NSE. This came after the stock witnessed a spectacular listing earlier this week.

However, despite the fall, Burger King shares are 169 percent up from its listing price.

In the case of Burger King, the valuation was unrealistic post-listing, so some amount of correction was expected, said Sudip Bandyopadhyay, Group Chairman, Inditrade Capital.

On the other hand, Mrs Bector’s Food Specialities’ public issue was subscribed 198 times on Thursday. Analysts do not expect any impact of profit-taking in the Burger King shares on Mrs Bector Food’s listing.

Bandyopadhyay said, “I don’t think this would impact the listing of Mrs Bector Food’s shares in any way since it has been subscribed 198 times already. Mrs Bector and Burger King are two different segments. Mrs Bector is into confectionary and cookies, and that’s a segment which has done exceedingly well during the pandemic, so I don’t see that getting affected.”

It’s a different matter that these valuations are stretched, said Bandyopadhyay, even for Mrs Bector’s Food and the listing may not happen at record levels if this trend continues.

Keshav Lahoti, Associate Equity Analyst, Angel Broking expects a good listing for Mrs Bector’s Foods Specialities but it might not be like that of Burger King.

“I don’t think the profit-taking in the market or in the Burger King shares will impact Mrs Bector’s Foods. It might not have 100 percent listing as of Burger King, but it will have a stellar listing,” Lahoti said.

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Burger King IPO: Here’s how you can check your allotment status today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Quick-service restaurant chain Burger King India’s initial public offer’s (IPO) allotment will be finalized today. It would be the fourteenth IPO in the current year. The price band of the IPO is fixed at Rs 59-60. The shares are likely to list on December 14.

The share sale was subscribed a massive 156.65 times, receiving bids for 11,66,93,73,500 shares as against 7,44,91,524 shares on offer. In fact, the IPO was fully oversubscribed within a few hours on the first day of bidding.

With the funds raised via the IPO , the company intends to utilise the fresh proceeds to finance the roll-out of new company-owned Burger King restaurants and to meet the general corporate purposes.

Most brokerage houses have recommended a ‘subscribe’ rating on the issue on the back of a strong franchisee model, negative working capital, market share gains and expansion plans. Expected revenue growth and robust growth in restaurant additions following its last five-year record are also key positives.

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Burger King IPO: Strong response from retail investors, issue subscribed about 39.6 times on Day 3

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering of quick-service restaurant chain Burger King India has been subscribed about 39.6 times so far on the third day of the bidding process.

The Rs 810-crore public issue has received bids for 294.77 crore equity shares against an IPO size of 7.45 crore equity shares, data available on the exchanges showed.

The portion reserved for retail investors is subscribed 52 times so far on Day 3, while the portion set aside for non-institutional investors is subscribed 85 times and that of qualified institutional investors 12 times.

Read here: Burger King IPO: Key things to know before you invest

This is the sixth IPO to be fully subscribed on the first day of its bidding process, following Happiest Minds Technologies, Route Mobile, Chemcon Specialty Chemicals, Mazagaon Dock Shipbuilders and Likhitha Infrastructure.

The company has already raised Rs 364.5 crore from anchor investors on December 1, a day before the issue opening.

The price band of the IPO is fixed at Rs 59-60. The issue will close on December 4 and the shares are likely to list on December 14.

The public issue consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd aggregating to Rs 360 crore.

Read here: Burger King IPO opens: Should you subscribe? Here’s what brokerages say

Most brokerage houses have recommended a ‘subscribe’ rating on the issue on the back of a strong franchisee model, negative working capital, market share gains and expansion plans. Expected revenue growth and robust growth in restaurant additions following its last five-year record are also key positives.

Burger King, the second-largest burger brand globally and is the fastest-growing QSR chain with a target to reach 700 restaurants by the end of 2026.

“For now, the debt to equity ratio is comfortable at 0.8x and the CFO has improved from the negative territory to Rs 112.7 crore in FY20. The company also plans to use some of the IPO proceeds to repay its debt and for expansion plans. However, stringent rules due to a new Covid wave might disrupt its plans and could be risky for a relatively new player in India given its strong competition,” said Nirali Shah, Senior Research Analyst, Samco Securities.

“At 2.7x P/Sales, Burger King is relatively cheap compared to 10.4x P/Sales and 6.32x for Jubilant Foodworks and Westlife Development respectively. Keeping the risks in mind, we advise investors to Subscribe for listing gains only for now. Further improvement in bottom-line, reduction of debt, and same-store sales growth should be analyzed in the following quarters to take a long-term call,” Shah added.

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Burger King IPO: Issue subscribed about 9 times on Day 2; retail portion booked 38 times

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering of quick-service restaurant chain Burger King India has been subscribed about 9 times so far on the second day of the bidding process.

The Rs 810-crore public issue has received bids for 69.86 crore equity shares against an IPO size of 7.45 crore equity shares, data available on the exchanges showed.

The portion reserved for retail investors is oversubscribed 37.8 times so far on Day 2, while the portion set aside for non-institutional investors is subscribed 3.6 times and that of qualified institutional investors 2.7 times.

Read here: Burger King IPO: Key things to know before you invest

This is the sixth IPO to be fully subscribed on the first day of its bidding process, following Happiest Minds Technologies, Route Mobile, Chemcon Specialty Chemicals, Mazagaon Dock Shipbuilders and Likhitha Infrastructure.

The company has already raised Rs 364.5 crore from anchor investors on December 1, a day before the issue opening.

The price band of the IPO is fixed at Rs 59-60. The issue will close on December 4 and the shares are likely to list on December 14.

The public issue consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd aggregating to Rs 360 crore.

Read here: Burger King IPO opens: Should you subscribe? Here’s what brokerages say

Most brokerage houses have recommended a ‘subscribe’ rating on the issue on the back of a strong franchisee model, negative working capital, market share gains and expansion plans. Expected revenue growth and robust growth in restaurant additions following its last five-year record are also key positives.

Burger King, the second-largest burger brand globally and is the fastest-growing QSR chain with a target to reach 700 restaurants by the end of 2026.

“For now, the debt to equity ratio is comfortable at 0.8x and the CFO has improved from the negative territory to Rs 112.7 crore in FY20. The company also plans to use some of the IPO proceeds to repay its debt and for expansion plans. However, stringent rules due to a new Covid wave might disrupt its plans and could be risky for a relatively new player in India given its strong competition,” said Nirali Shah, Senior Research Analyst, Samco Securities.

“At 2.7x P/Sales, Burger King is relatively cheap compared to 10.4x P/Sales and 6.32x for Jubilant Foodworks and Westlife Development respectively. Keeping the risks in mind, we advise investors to Subscribe for listing gains only for now. Further improvement in bottom-line, reduction of debt, and same-store sales growth should be analyzed in the following quarters to take a long-term call,” Shah added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Burger King IPO: Issue fully subscribed on day one; retail portion booked over 9 times

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering of quick-service restaurant chain Burger King India has been subscribed 1.8 times so far on the first day of the bidding process.

The Rs 810-crore public issue has received bids for 13.24 crore equity shares against an IPO size of 7.45 crore equity shares, data available on the exchanges showed.

The portion reserved for retail investors is oversubscribed 9.4 times so far on Day 1, while the portion set aside for non-institutional investors is subscribed by 18.5 times and that of qualified institutional investors 1 percent.

The company has already raised Rs 364.5 crore from anchor investors on December 1, a day before the issue opening.

Read here: Burger King IPO opens today: Key things to know before you invest

The price band of the IPO is fixed at Rs 59-60. The issue will close on December 4 and the shares are likely to list on December 14.

The public issue consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd aggregating to Rs 360 crore.

Read here: Burger King IPO opens: Should you subscribe? Here’s what brokerages say

Most brokerage houses have recommended a ‘subscribe’ rating on the issue on the back of a strong franchisee model, negative working capital, market share gains and expansion plans. Expected revenue growth and robust growth in restaurant additions following its last five-year record are also key positives.

Burger King, the second-largest burger brand globally and is the fastest-growing QSR chain with a target to reach 700 restaurants by the end of 2026.

“For now, the debt to equity ratio is comfortable at 0.8x and the CFO has improved from the negative territory to Rs 112.7 crore in FY20. The company also plans to use some of the IPO proceeds to repay its debt and for expansion plans. However, stringent rules due to a new Covid wave might disrupt its plans and could be risky for a relatively new player in India given its strong competition,” said Nirali Shah, Senior Research Analyst, Samco Securities.

“At 2.7x P/Sales, Burger King is relatively cheap compared to 10.4x P/Sales and 6.32x for Jubilant Foodworks and Westlife Development respectively. Keeping the risks in mind, we advise investors to Subscribe for listing gains only for now. Further improvement in bottom-line, reduction of debt, and same-store sales growth should be analyzed in the following quarters to take a long-term call,” Shah added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Burger King IPO opens: Should you subscribe? Here’s what brokerages say

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Quick-service restaurant chain Burger King India’s initial public offer (IPO) opened for subscription today. This would be the fourteenth IPO in the current year. The price band of the IPO is fixed at Rs 59-60.  The issue will close on December 4 and the shares are likely to list on December 14.

The company aims to raise Rs 810 crore via the IPO and intends to utilise the fresh proceeds to finance the roll-out of new company-owned Burger King restaurants and to meet the general corporate purposes.

Rajeev Varman, CEO of Burger King India, in an interview with CNBC-TV18 said that they will use the money raised towards repayment of term loans and building restaurants.

Most brokerage houses have recommended a ‘subscribe’ rating on the issue on the back of a strong franchisee model, negative working capital, market share gains and expansion plans. Expected revenue growth and robust growth in restaurant additions following its last five-year record are also key positives.

Here’s what brokerages have to say:

Geojit Financial Services

As per the brokerage, the company enjoys exclusive rights to develop, establish, operate and franchise Burger King branded restaurants as the national master franchisee. The company’s revenue grew around 49 percent CAGR over FY18-FY20 led by significant store additions.

“At the upper price band of Rs 60, a share of Burger King India is available at 29 times FY20 EV/Ebitda and 3.6 times FY20 EV/sales, which Geojit said is attractive. This is considering the company’s robust growth in-store additions and an expected rise in future revenues. The brokerage has recommended ‘subscribe’ rating on the issue with a long-term perspective,” it noted.

Prabhudas Lilladher

The brokerage recommends subscribing to the IPO given the brand’s success in just five years with 260 stores. The firm has a target of 700 stores by 2026. The company plans to utilize proceeds of IPO for store expansion and has plans to add 50/70/80 stores in the coming three years.

The brokerage believes Burger King has competitive advantages which make it well placed to capitalise on emerging opportunities, however, expects near-term financials to remain under pressure. The firm suffered a loss of Rs 118 crore in the first half of 2021 (H121) but Prbhdal Lilladher expects a turnaround by FY23/24, led by post-Covid-19 recovery and new store openings.

Choice Broking

As per the brokerage, Burger King’s key competitive strength are exclusive national master franchise rights in India, strong customer proposition, the brand positioned for millennials, operational quality, well-defined restaurant development process, and professional management team. Hence the brokerage recommends a ‘subscribe’ rating for the issue.

However, key risks remain unfavorable macroeconomic conditions, continuation or worsening of the Covid-19 crisis, slower expansion in the restaurant network, and competition from other QSR entities and delivery aggregators.

ICICI Direct

The brokerage believes benefiting from reduced competition from unorganized smaller local restaurants due to COVID related disruptions and expansion of food delivery businesses, the company is well-positioned to expand its footprint in India.

“We believe Burger King would be able to capture the growth largely aided by changing habits of eating out/ordering outside food. The company was quick to scale up its operating margins to double-digit in the last two years. However, it is still making a loss at the bottom line level due to high depreciation provision,” said the brokerage which has a ‘subscribe’ recommendation on the stock.

Angel Broking

As per the brokerage, Burger King won’t get a premium valuation as Jubilant Foodworks since it does not have a profitability track record like Jubilant. However, Burger King has priced its issue at a significant discount compared to Jubilant Foodworks, so looking at the valuation and the growth the company is expected to report in the future, the issue is looking attractive.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow