Burger King India shares were seen in huge demand on the opening day of Initial Public Offering (IPO) on Wednesday. Burger King India's Rs 810 crore IPO, which will remain open till Friday, was oversubscribed within hours of opening. As of 12:30 pm, Burger King India IPO was oversubscribed 1.45 times, according to the data on the National Stock Exchange. Burger King India IPO received bids in excess 10 crore shares as against 7.45 crore shares on offer.
The quick service restaurant (QSR) chain has fixed the issue price in the price band of Rs 59-60 per share and it received bids over 7.92 crore shares at the cut-off price.
The Burger King IPO involves fresh issue of equity shares worth Rs 450 crore and an offer for sale of Rs 360 crore by the promoter QSR Asia. The company has already raised Rs 91.92 crore from Amansa Investments in a pre-IPO placement, at a price of Rs 58.50 per share.
Retail bids for the public offering can be placed for a minimum one lot of 250 equity shares and in multiples thereafter, up to 13 lots.
"At upper price band of Rs 60, the IPO is valued at price to sales (P/S) ratio of 2.7 times based on FY20 sales, compared to peers like Jubilant FoodWorks (8.4 times) and West Life Development (4.4 times). Also, on per store basis, the company's valuation (market cap/total stores) stands at Rs 8.8 crore, compared to Jubilant FoodWorks' (Rs 26.2 crore) and Westlife (Rs 23.8 crore). The valuation seems reasonable when compared to peers," brokerage firm Anand Rathi said in a research report.
"While the COVID-19 crisis have impacted short term growth, we believe the company remains well placed for long-term growth, given its strong brand position, diverse food offerings, well established supply chain, aggressive expansion plans, cost management efforts and benefit from the gradual recovery in the QSR industry post COVID. As such, we recommend subscribe to this IPO," Anand Rathi added.