Burger King has undertaken a pre-IPO placement by way of a Rights Issue to Promoter Selling Shareholder worth Rs 58 crore and a preferential allotment worth Rs 91.92 crore.
The a lot awaited Burger King initial public providing (IPO) will open for subscription subsequent week on December 2 and will close on December 4. The US-primarily based rapid-meals major’s India unit is providing shares to investors in the price tag band of Rs 59-60 per share in a lot size of 250 shares and multiples thereafter. The minimum investment that one particular can make for the concern will be Rs 15,000 on the upper finish of the price tag band. Burger King had earlier in January received SEBI’s nod to float its IPO.
Issue facts
The enlarged public concern of Rs 810 crore, consists of a fresh concern of Rs 450 crore and an Offer for Sale (OFS) of 6 crore equity shares by current shareholders. The promoter promoting shareholder QSR Asia could collect Rs 360 crore from the OFS at the larger finish of the price tag band. Pre-supply QSR Asia holds 28.93 crore equity shares or 94.34% of the total share capital. Burger King had earlier in October filed an addendum to the DRHP with SEBI exactly where it had enhanced the fresh concern size to Rs 600 crore from the Rs 400 crore it had earlier planned in January.
Not much less than 75% of the concern will be reserved for Qualified Institutional Buyers (QIB) even though only 15% will be reserved for Non-Institutional Investors (NIIs) and merely 10% for retail investors. Ahead of the public concern, Burger King has undertaken a pre-IPO placement by way of a Rights Issue to Promoter Selling Shareholder worth Rs 58 crore and a preferential allotment worth Rs 91.92 crore which has brought the fresh concern size to Rs 450 crore from Rs 600 crore.
Peer comparison
Burger King is the second biggest rapid meals brand globally with a international network of more than 18,000 restaurants in far more than one hundred nations. “Burger King is growing rapidly in India, revenue of the company increased from Rs 230 crore in financial year 2017 to Rs 633 crore in financial year 2019. On the other hand, the company has reduced its losses from Rs 72 crore to Rs 38 crore between the same time period,” stated Keshav Lahoti, Associate Equity Analyst, Angel Broking.
However compared to Jubilant FoodWorks, the corporation that runs the popular Domino’s Pizza chain, Burger King nevertheless has some catching up to do. “We believe Burger King won’t get such a premium valuation as Jubilant Foodworks as it does not have a profitability track record like Jubilant, its outlets are young and we believe majority of the Indian people prefers Jubilant – Pizza over burger sold by Burger King,” he added.
Objectives of the concern
With the fresh concern receipts, Burger King plans to add far more corporation-owned retailers to its portfolio. According to the addendum filed in October, Burger King had 261 retailers at the finish of the second quarter of this fiscal. By 2026, Burger King plans to open at least 700 restaurants. Burger King will also use the fund toward repayment or prepayment of outstanding borrowings.