Burger King listing bonanza for IPO investors; shares debut at 92% premium to issue price

Burger King shares made Dalal Street debut today at Rs 115.35 per share, up 92% from the issue price of Rs 59-60 per share. The stock zoomed further on opening bell and was seen trading at Rs 119.5 apiece minutes later. Burger King’s initial public offering was massively oversubscribed by investors across categories earlier this month. Overall, the issue was subscribed 156 times, making it the second most subscribed IPO of 2020.

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Shares of Burger King gained 3.4% from listing price, soon after the opening bell. The firm, on listing, had a market capitalization of Rs 4,402 crore. Burger King, one of the fastest growth Quick Service Restaurant (QSR) chains in the country is the domestic arm of US-based Burger King. In the unlisted market, shares of the fast food major were trading at 83% premium over the weekend, just ahead of its stock market debut.

The stock was subscribed massively by non-institutional investors, bidding for their portion of the issue 354 times. Qualified Institutional Buyers oversubscribed their portion of Burger King’s IPO 85 times, while retail investors oversubscribed their portion by 67 times. Post the issue, promoters of the company now hold a 60.1% stake, down from 94.3% pre-issue. Public shareholding in Burger King has increased to 39.9%, from 5.7% pre-issue. 

Also Read: Burger King IPO listing day strategy: Sell after listing gains, or hold for more returns?

Burger King will raise Rs 450 crore from the issue while Rs 360 crore will come from the Offer For Sale (OFS) for the promoters of the firm. The QSR chain aims to use the majority of the fresh issue amount to fund fresh roll out of new restaurants as it aims to reach the target of 700 restaurants by 2026.

Financially, Burger King operating income has increased from Rs 378 crore in Financial Year 2017 to Rs 841 crore in the previous fiscal year. EBITDA over the same period has gone from Rs 8 crore to Rs 103.9 crore. Although Burger King continued to make net losses, its highly recognised brand value and the growth potential of the QSR industry is luring investors towards the firm.