Quick service restaurant chain Burger King India will launch its maiden public offer for subscription on December 2 at a price band fixed at Rs 59-60 per share. This is 5.9-6 times its face value of equity shares.
The initial public offering (IPO), which will open for subscription on December 2 and close on December 4, 2020, consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd aggregating to Rs 360 crore.
At a higher price band, the Indian subsidiary of US-based Burger King aims to raise Rs 810 crore via the issue.
Investors can bid for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter. It means retail investors can apply for a maximum up to 3,250 equity shares at a higher price band.
The company has reserved up to 10 percent portion of IPO for retail investors, upto 15 percent for non-institutional investors and up to 75 percent for qualified institutional investors.
The company would utilize fresh issue proceeds to roll out of new company-owned Burger King Restaurants and general corporate purposes.
Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial are the book running lead managers to the issue.
The equity shares are expected to debut on bourses around December 14, 2020.
Burger King is growing rapidly in India, revenue of the company increased from Rs 230 crore in FY17 to Rs 633 crore in FY19. On the other hand, the company has reduced its losses from Rs 72 crore to Rs 38 crore from FY17 to FY19.
“Burger King peer Jubilant Foodworks is currently trading at 8.7 EV/sales on FY20 basis. 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,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking.
(Edited by : Abhishek Jha)