Is Burger Kings IPO as Mouth Watering as Their Burger?

Is Burger Kings IPO as Mouth Watering as Their Burgers?

About the Company:

Founded in 1954, Burger King is the second-largest fast-food hamburger chain in the world with a global network of 18,675 restaurants in more than 100 countries as of September 2020.

Technopak report says Burger King India is one of the fastest-growing Quick Service Restaurant (QSR) brands among international QSR brands in India during the first five years of operations.

As of November 25, the company had 259 its owned Burger King restaurants and 9 sub-franchised Burger King restaurants.

About the IPO

The IPO of Burger King aims at raising INR 810 crores out of which the fresh issue is of INR 450 crores comprising 7,50,00,000 shares and the remaining INR 360 crores will be raised through offer for sale of 6,00,00,000 shares. The IPO will open for subscription on 2nd December (Wednesday) and close on 4th December (Friday). The price band has been fixed at ₹59 to ₹60 with the minimum lot size of 250 shares. This means one has to pay at least ₹15,000 to bid for the issue.

Kotak Mahindra Capital Company and CLSA India, JM Financial and Edelweiss Financial Services are the leading book managers for the issue.

Burger King IPO Details

IPO Date	2nd December, 2020 to 4th December, 2020
Issue Type	Book Built Issue IPO
Issue Size	13,50,00,000 Eq Shares of ₹10 (aggregating up to ₹810 Cr)
Fresh Issue	7,50,00,000 Eq shares of ₹10 (aggregating upto ₹450 Cr)
Offer For Sale	6,00,00,000 Eq shares of ₹10 (aggregating upto ₹360 Cr)
Face Value	₹10 per equity share
IPO Price	₹59 to ₹60 per equity share
Market Lot	250 Shares
Min Order Quantity	250 Shares
Listing at	BSE, NSE

Burger King IPO Tentative Timetable

Bid/Offer Opens On	2nd Dec, 2020
Bid/Offer Closes On	4th Dec, 2020
Finalisation of Basis of Allotment	9th Dec, 2020
Initiation of Refunds	10th Dec, 2020
Credit of Shares to Demat Acct	11th Dec, 2020
IPO Shares Listing Date	14th Dec, 2020

Lot Size And Price

Application	Lots	Shares	Amount
Minimum	1	250	₹15,000
Maximum	13	3250	₹1,95,000

Promoter Holding

Pre Issue Share Holding	99.39%
Post Issue Share Holding	60.08%

Objective of the issue:

The company will utilise the net fresh issue proceeds to finance roll out of owned Burger King Restaurants by way of repayment or prepayment of outstanding borrowings to set up new owned restaurants and general corporate purposes.

But the company won't get any proceeds from the offer for sale as the money will go to the promoters selling shares.

Important Finances

Summary Of Financial Information

Particulars	For the year (₹ in million)
	31-Mar-20	31-Mar-19	31-Mar-18
Total Assets	11,977.07	9,204.72	7,303.55
Total Revenue	8,468.29	6,441.20	3,887.37
Profit After Tax	765.70	382.79	822.32

Comparison With Peers:

Company	Revenue (Rs. Crore)	OPM (%)	Price to Sales	EV/EBITDA
Jubilant Foodworks	3885.8	22.6	8.5	38.7
Westlife Development	1547.8	14.1	4.4	31.3
Burger King	841.2	12.4	2.7	29.5

Company's Strength:

1. Strong customer value proposition.

2. Vertically managed and scalable supply chain.

3. Well defined restaurant roll out and development process.

4. Exclusive national master franchise rights in India.

5. Experienced and professional management team.

Our Outlook:

The sentiments are positive and we recommend subscribing for listing gains and you can also keep it in your portfolio with long term perspective.