Continuing the momentum of IPO’s being launched in India, Burger King India Limited’s IPO was open for subscription between December 2 and 4, 2020.
Burger King‘s shares were listed on the bourses on December 14. The company’s stock price ended 125% higher at Rs 135 per share on the first day of its listing. It listed at a premium of 92%.
Here is all you need to know about the company’s IPO issue:
Read More: Steps to Invest in IPO on Groww
Burger King India Limited IPO Details
|IPO Date||December 02, 2020 to December 04, 2020|
|Issue Type||Book Built Issue IPO|
|Issue Size||135,000,000 Equity Shares of Rs.10 totaling up to Rs.810 Crore|
|Fresh Issue||75,000,000 Equity Shares of Rs.10 totaling up to Rs.450 Crore|
|Offer for Sale||60,000,000 Equity Shares of Rs.10 totaling up to Rs.360 Crore|
|Face Value||Rs.10 per equity share|
|IPO Price||Rs.59 to Rs.60 per equity share|
|Market Lot||250 Shares|
|Min Order Quantity||250 Shares|
|Listing At||BSE, NSE|
Objects of the Offer
Burger King India Limited proposes to utilize the net proceeds from the fresh issue for funding the roll-out of new company-owned Burger King Restaurants and general corporate purposes.
Burger King India Limited IPO Tentative Timetable
|Bid/Offer Launch date||December 02, 2020|
|Bid/Offer Last date||December 04, 2020|
|Basis of Allotment finalization date||December 09, 2020|
|Initiation of Refunds||December 10, 2020|
|Credit of Shares to Demat Acct||December 11, 2020|
|IPO Shares Listing Date||December 14, 2020|
About the Company – Burger King India Limited
Burger King India Limited is one of the fastest-growing international quick-service restaurant (QSR) chains in India during the initial five years of its operations based on the number of outlets.
It is the national master franchisee of the Burger King ® brand in India. Hence, the company has exclusive rights to develop, establish, operate, and franchise Burger King branded restaurants in India.
The global brand was founded in the US in 1954 and owned by Burger King Corporation, a subsidiary of Restaurant Brands Inc. It is the second-largest fast-food burger brand globally with a global network of more than 18000 restaurants in more than 100 countries.
The master franchise agreement allows the company to tailor the menu to Indian tastes and preferences, as well as pricing. Burger King India Limited endeavors to cater to the local Indian palate with a range of options using the brand’s flame grilling expertise.
The first restaurant was opened in 2014 and as of June 30, 2019, Burger King India had 202 restaurants including seven sub-franchised Burger King Restaurants in the country.
Burger King Corporation awarded Burger King India Limited the “Global Master Franchisee of the Year” in 2018 for its strong business performance on sales, operations, development, and profitability.
Further, the company has consistently won regional performance awards since 2015, including “APAC Master Franchisee of the Year” and “APAC Operator of the Year” in 2018, as well as “APAC Marketer of the Year” in 2017 and 2018.
1. Strengths of Burger King India Limited
- Burger King India Limited is the national master franchisee of the Burger King brand in India, with exclusive rights to develop, establish, operate, and franchise Burger King branded restaurants in India.
- The company endeavors to offer quality products that are tailored to Indian taste and preferences and provide substantial value at attractive price points. It has a range of vegetarian and non-vegetarian burgers covering both value and premium offerings. The menu items are developed to be made in India and cater to the local Indian palate.
- The company has positioned the brand to target the millennial population. With India’s millennial population growing at a steady pace, the brand is trying to benefit from the focused approach.
- The company has a vertically managed and scalable supply chain model in which it individually negotiates with and actively manages its suppliers of ingredients and packaging materials.
- Burger King India Limited has made significant investments in its operations and is disciplined about maintaining well-defined and standardized processes in order to promote and maintain the quality of its operations across its business.
- The operations of the company are driven by its people-centric policies and practices, which are principal components of its ability to enhance customer experience at its restaurants.
- Burger King India Limited has a well-defined new-restaurant rollout process that enables it to identify locations and build out restaurants quickly, consistently, and efficiently. It builds its restaurant network using a cluster approach and penetration strategy with the objective to provide greater convenience and accessibility for its customers across relevant geographies.
- The management team of the company includes former senior employees with significant work experience in the food and beverage industry, retail, and major fast moving consumer goods brands.
2. Risk Factors
- Real and perceived health concerns arising from food-borne illnesses, health epidemics, food quality, allergic reactions, or other negative food-related incidents could have a material adverse effect on the company’s business, results of operations, financial condition, and prospects.
- The company’s exclusive right to develop, operate and franchise Burger King restaurants in India depends on the Master Franchise and Development Agreement, which imposes certain restrictions and other obligations on its operations and the termination of which would adversely affect its business, results of operations, financial condition, and prospects.
- The demand for Burger King’s products may decrease due to changes in consumer preferences and food habits, which could have a material adverse effect on its business, results of operations, and financial condition.
- The company’s business depends in part on the continued international success and reputation of the Burger King brand globally, and any negative impact on the Burger King brand may adversely affect its business, results of operations, and financial condition.
- Any deterioration in the performance of, or relationships with, third-party delivery aggregators, may adversely affect the company’s business, results of operations, and financial condition.
- Burger King may not be able to identify suitable locations and successfully develop and roll out new restaurants, and its expansion into new regions and markets may present increased risks due to its unfamiliarity with the areas in which the restaurants are located.
- New restaurants may not be profitable or perform as planned and could also adversely impact sales in its existing restaurants, which could adversely affect its business, results of operations, and financial condition.
- The success of the company’s business strategy depends on its ability to establish, deliver and maintain its value leadership strategy, the failure of which could have a material adverse effect on its business, results of operations, and financial condition.
- Changes in governmental regulation or public perception with respect to healthy eating habits could adversely affect the company’s business, results of operations, and financial condition.
- Any failure to maintain effective quality control systems for its supply chain or restaurants could have a material adverse effect on its business, reputation, results of operations, and financial condition.
- Failure to obtain or maintain or renew licenses, registrations, permits, and approvals in a timely manner or at all may adversely affect the company’s business and results of operations.
- The company relies on a single third-party distributor for the purchase, supply, and delivery of most of its ingredients and packaging materials and if it is required to source its ingredients or packaging materials from alternative distributors, deliveries to certain of its restaurants may be disrupted or delayed, which could adversely affect its operations and have an adverse effect on its business, results of operations, and financial condition.
Here is a quick look at some important information about Burger King India Limited:
3. Overview of Burger King India Limited’s financials
|Profit After Tax||
All amounts in INR Crore
4. Promoters of Burger King India Limited IPO
- QSR Asia PTE. Ltd.
Burger King India Limited is required to open at least 700 restaurants by December 31, 2026, as per the Master Franchise and Development Agreement. Before you invest, ensure that you read through the company’s financials and the Red Herring Prospectus (RHP) carefully.
Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.