The IPO consists of a fresh issue of Rs 450 crore and an offer for sale (OFS) of up to 6 crore shares, aggregating Rs 360 crore. It is being sold in the price band of Rs 59-60 apiece. Retail investors willing to invest can buy a lot of 250 shares and a maximum of 3,250 shares.
The company had on Tuesday raised Rs 364.5 crore from anchor investors.
At an upper price band of Rs 60, the IPO is valued at a price-to-sales ratio of 2.7 times based on FY20 sales, compared with peers Jubilant FoodWorks' 8.4 times and Westlife Developments's 4.4 times. On a per store basis, market cap to total stores stands at Rs 8.8 crore compared with Jubilant FoodWorks' Rs 26.2 crore and Westlife's Rs 23.80 crore.
"The valuation seems reasonable when compared to peers. While the Covid-19 crisis have impacted short term growth, we believe the company remains well placed for long term growth, given its strong brand position, diverse food offerings, well established supply chain, aggressive expansion plans, cost management efforts and benefit from the gradual recovery in the QSR industry post Covid," Anand Rathi said.
Choice Broking said that the company is in a growth phase and has scheduled an aggressive restaurant expansion plan. "Considering Covid-19 as an exceptional phase for the sector, we feel that with positive advancement in vaccine development and considerable relaxation in the economic activities, Burger King is expected to report improved financials over the period. Considering the discounted valuations, we assign a 'subscribe' rating to the issue," it said.
Benefiting from reduced competition from unorganised smaller local restaurants due to Covid related disruptions and expansion of food delivery businesses, the company is well positioned to expand its footprint in India, said ICICI Securities.
"We believe BKI would be able to capture the growth largely aided by changing habits of eating out/ordering outside food. The company was quick to scale up its operating margins to double digit in the last two years. However, it is still making a loss at the bottom line level due to high depreciation provision. We have a subscribe recommendation on the stock," the brokerage said.
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3 Comments on this Story
Shivam51 days ago
Burger King will be the King of IPOs probably ?
But trading will be 'shandar' after 6-8 months !!! Maybe it will reach Rs. 100 soon ! I am expecting listing at Rs.82-85 !!
Binu Pillai51 days ago
The IPO will oversubscribe 150 times on the final day.. Only very rare people will get the allotment... Listing will be at 250% the IPO price.. It is all a huge SCAM..
balaji krishna51 days ago
for burger King it's healthy but not people eating burger.