After a stellar debut on bourses, Burger King India continue to gain with the share price of the quick services restaurant chain locked at an upper circuit of 20 percent at Rs 194.40 in early trade on Wednesday. The current stock price is more than three times the issue price.
There were 73,79,264 pending buy orders for the stock with no sellers on the NSE. The market-cap of Burger King India crossed Rs 7,300 crore.
Burger King India shares were listed at a strong premium of about 90 percent on Monday.
Read here: Burger King's ‘Whopper’ listing: Stock debuts at Rs 112.5 apiece on NSE, an 87.5% premium
The Rs 810 crore-initial public offering (IPO) of Burger King India had received an overwhelming response as the offer was subscribed 156.65 times.
On Monday, Basant Maheshwari Wealth Advisers and Valiant Mauritius Partners Offshore acquired a 1.29 percent equity stake in Burger King India via open market transactions.
Burger King, the second-largest burger brand globally and is the fastest-growing QSR chain with a target to reach 700 restaurants by the end of 2026.
Even after such a bumper listing, analysts believe there was no issue with the valuation of the company.
“In the future, we expect the company to gain market share by opening more stores compared to the competitors. As the store count will increase, operating leverage will kick in and the company will be able to report profit and it will lead re-rating of the multiple for the stock,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking.
The company enjoys exclusive National Master Franchisee Rights in India till December 31, 2039, with an obligation to develop and open at least 700 restaurants by December 31, 2026. The royalty rate is favorable with capping at 5 percent of sales.
“Over FY18-20, Burger King India’s Revenue/EBITDA grew at a CAGR of 49 percent /258 percent led by 2x the store strength. However, it continues to make losses at the PAT level. The same-store sales growth stood at 12.2 percent /29.2 percent in FY18/FY19 while it surprisingly became flat in FY20. In 1HFY21, revenue declined 68 percent YoY, while it made losses at EBITDA and PAT levels due to the Covid-19 impact,” said Hemang Jani, Head—Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services Ltd.
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