Burger King India IPO: Here’s All You Need To Know
A customer eats a Rebel Whooper at a Burger King Holdings Inc. fast-food restaurant in Milan, Italy. (Photographer: Camilla Cerea/Bloomberg)

Burger King India IPO: Here’s All You Need To Know

Burger King India Ltd. will launch its three-day initial public offering on Wednesday, eight months after the domestic unit of the U.S.-based quick service restaurant chain put the plan on hold as the Covid-19 outbreak roiled markets.

The burger chain operator plans to raise Rs 810 crore through the maiden offer, the price band for which has been fixed at Rs 59-60 apiece, according to its red herring prospectus. The IPO comprises a fresh equity issue worth Rs 450 crore and an offer-for-sale of 6 crore shares by promoter QSR Asia Pte Ltd. worth Rs 360 crore.

  • Issue opens: Dec. 2
  • Issue close: Dec. 4
  • Face value: Rs 10 per share
  • Listing on: NSE, BSE
  • Minimum Bid: 250 shares

The proceeds from the share sale, the company said, will be used to repay borrowings and open new stores. Kotak Mahindra Capital Market Ltd., CLSA India Pvt. Ltd., Edelweiss Financial Services Ltd. and JM Financial Ltd. are the lead managers to the issue.

Pre-IPO, Burger King, by way of rights issue, allocated 1.32 crore equity shares at Rs 44 apiece to QSR Asia. That amounted to Rs 58.08 crore. It has also raised Rs 91.92 crore through preferential allotment of shares to Amansa Investments Ltd. at Rs 58.5 apiece.

Burger King had initially planned to launch the IPO in March but put it on hold after the country’s equities market tumbled on fears of a global economic slowdown and the spread of novel coronavirus. Activities in the secondary market picked up pace after the benchmarks rebounded on the optimism stemming from the fiscal and monetary stimulus announced by the government and central bank, a faster-than-expected pickup in economic activities after lockdown curbs were eased, robust foreign flows and a potential Covid-19 vaccine.

Barring Burger King, the 12 share sales so far in 2020 have cumulatively raised nearly Rs 25,000 crore, according to a PTI report, with most of them listing at a premium to their issue price. That, it said, compares with the Rs 12,362 crore mopped up through 16 maiden offers in the entire 2019.

Watch BloombergQuint’s conversation with Burger King India managements before the IPO launch:

Business

Burger King India is the national master franchisee of the Burger King brand in the country. It has exclusive rights to develop, establish, operate and franchise Burger King branded restaurants in India. Its master franchisee arrangement provides the company with the ability to use Burger King’s globally recognised name to grow its business in India, while leveraging the technical, marketing and operational expertise associated with the global brand.

Burger King is the second-largest fast food burger brand globally as measured by the total number of restaurants. It has a global network of 18,675 restaurants in more than 100 countries and the U.S. territories as on Sept. 30.

Financials

Peer Comparison

In the Indian QSR segment, Burger King competes with McDonalds, operated by listed Westlife Development Ltd. in the western and southern regions, and Domino’s Pizza, operated by listed Jubilant Foodworks Ltd. Among non-listed peers are KFC, Subway and Pizza Hut, besides local restaurants in the segment.

Key Risks

  • The outbreak of the Covid-19 pandemic
  • Real and perceived health concerns arising from food-borne illnesses, health epidemics, food quality, allergic reactions or other negative food-related incidents
  • The termination of master franchise and development agreement
  • Demand for products may decrease due to changes in consumer preferences and food habits
  • Business depends in part on the continued international success and reputation of the Burger King brand globally, and any negative impact on the brand may have an adverse impact
  • Deterioration in the performance of, or its relationships with, third-party delivery aggregators
  • Inability to identify suitable locations and successfully develop and roll out new restaurants, and expand into new regions and markets

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