Key Things to Know About Burger King IPO

The Indian subsidiary of Burger King will float initial public offering shares to raise Rs 810 crores from the market. The company mentioned in the red herring prospectus that the offer will open on December 2 and investors can bid till December 4 for a minimum lot size of 250 equity shares. Before launching the IPO, the company has already raised Rs 58.08 crores through rights issues and 91.92 crores via preferential allocation route. The IPO will make Burger King the seventeenth company to list in the exchanges in FY2020-21.  Sixteen corporates have already raised Rs 25,000 crores via IPO route in FY 2020. 

The Indian Burger King is the subsidiary of the parent brand in the US. It is promoted by QSR Asia Pte. Ltd in India, have 216 Burger King restaurants and eight franchise restaurants in the airports. Burger King India holds the exclusive right to establish, operate, and develop restaurants under the international brand name in the country. Currently, it is the fastest-growing quick-service restaurant, looking to raise more capital to aid the expansion plan.  

Launching at a deeply discounted rate in the price band of Rs 59-60, Burger King IPO could be a tasty treat for the investor. But before you subscribe here are the key things to know about Burger King IPO 2020. 

When is the Burger King IPO launching date?

The subscription for the IPO will begin on December 2 and remain open till December 4, 2020.

What is the size of Burger King IPO?

Burger King plans to raise Rs 810 crores from the market through the IPO route. The offer will contain both fresh shares and offer for sale scrips from the promoter group. The company has already amassed about Rs 150 crores in the pre-IPO placement of shares which has reduced the IPO size of fresh scrips from Rs 600 crores to Rs 450 crores.

What is the portion of the offer for sale shares in the offer?

The promoter group QSR Asia Pte. Ltd. is offering to sell shares worth Rs 360 crores on the higher restrict of the price band.

What is the price band of the Burger King IPO?

The company is launching the shares at a discounted rate which might interest more number of investors. The shares will launch in the price band of Rs 59-60, which is lower than expected.

What is the minimum lot size for the IPO?

Investors will have to place a bid for a minimum of 250 equity shares.  The upper limit for retail investors is set at a maximum of three lots. 

What is the allowance for retail investors in Burger King IPO?

As per the RHP, 10 percent is reserved for retail investors. Rest will be divided among non-institutional and qualified institutional buyers (QIBs) following SEBI ICRD rules. 

Is there any employee quota?

No. The offer doesn’t contain an employee quota.

When will Burger King host IPO sell for anchor investors?

The bidding window for anchor investors will open a day before it opens for the general investors, meaning on December 1, 2020. It will take place for one working day following SEBI rules.

What does the company propose to do with the fund?

Burger King stated in its RHP that it would utilise the proceeding from the IPO to repay debts and fund its expansion plan. The company aims to have 700 outlets all over India by 2026, generating additional employment of 8,640- 10, 800. 

It has a long term growth plan, which might make the IPO offer attractive to investors.

Who are the offer managers of the IPO?

On Burger King’s behalf Kotak Mahindra Capital Company Limited, CLSA India Private Limited, Edelweiss Financial Services Limited and JM Financial Limited will act as the book running lead managers.

Who is the registrar of the offer?

Link Intime India Pvt Ltd. will act as the registrar of the offer.

When will finalisation of base of allotment happen?

Usually, it takes a week to finalise the IPO allotment process. In the case of Burger King, the tentative date of finalisation of allotment is December 9 and refund initiation will happen on December 10, 2020. 

When is the listing date of Burger King IPO?

Burger King IPOs will make a stock exchange debut on December 14. The shares will list on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Who are the peer companies of Burger King listed in the bourses?

 McDonald shares are trading since 2009, and Dominos India made a debut on 2010. Shares of both companies have generated magnificent returns for investors. Westlife Development shares, the company that backs McDonald, surged 175,900 percent since debut. Similarly, the promoter company of Dominoes, Jubilant FoodWorks shares have gained 2,100 percent since 2010. In FY2019, Westlife and Jubilant shares traded at 6x and 4x of their values respectively. 

What are the risk factors, if any?

COVID-19 outbreak has caused a dent in its business since March. The company has mentioned it in its red herring prospectus. Also, for the last three years, it has accumulated losses amid rising concerns over food-related health issues and the outbreak of a pandemic.  

For Indian investors, the global performance of the brand will also impact earning from the shares.  

Before investing, understand the merit of an IPO

Our advice remains to all investors is to learn the essential things about an IPO offer before investing. We understand it is a challenge for investors to find adequate information regarding an offer since there is no previous data to base a decision. To overcome that, try to find as much information as you can regarding the offer like reading the red herring prospectus, understanding the main economic factors that can influence the performance of the sector, competitor performance, future possibilities of growth, and such. For the sake of our readers and possible investors, we have collected all information regarding the key things to know before applying for Burger King IPO.    

The Bottom line 

Discounted share price, strong retail presence, customer loyalty, exclusive franchise, strong value proposition are some of the factors that will attract investors to the offer. Also, those who missed investing in Westlife and Jubilant IPOs may like to take the opportunity.  Burger King is the fastest-growing quick-service restaurant chain in India with more than 200 outlets across the country. Debuting in 2014, it is also the fastest to launch IPO offers within six years of operation. 

You can now make a better decision regarding the IPO offer with the things to know about Burger King IPO 2020 listed above.