Burger King: Fully Prepared for its INR 810 crore IPO, Value-Setting at Rs.59-60 earning per share
Burger King India Limited (BK), which is a chain of hamburger fast-food restaurants on Friday, has established an estimated valuation band of Rs.59-60 per share for its initial public offering (IPO) of Rs.810 crore opening on 2nd December.
In a statement, Burger King India Limited which is a Quick Service Restaurant (QSR) chain has stated in its red herring prospectus that it will use the funds or investments to pay down the existing debt and finance capital expenditures for new stores owned by the company.
However, the Initial Public Offering (IPO) comes on the heels of a new wave of coronavirus (COVID-19) infections in some states, elevating concerns that local authorities are imposing new restrictions.
Besides, the company’s CEO Rajeev Carman said that moving demand from the unorganized sector to the organized sector and falling real estate prices will open up opportunities for the company, which is well funded and has a good team in place.
Moreover, Burger King will have a market capitalization of Rs.2, 290 crores and will also comprise secondary share sale worth Rs.360 crore
The Quick Service Restaurant’s promoter entity QSR Asia Pte Ltd, which is owned by private equity business Everstone Group, will sell up to 60 million shares or dividend worth Rs.360 crore while the burger king will sell new shares worth Rs.360 crore, as well as the promoter entity, will hold 52.9 percent in the company.
Meanwhile, the firm has raised pre-IPO (Initial Public Offering) from the public market investor Amansa Investments at Rs.58.5 per share and Burger King India Limited had described the revenue from operations in its financial year 2019-2020 of Rs.841 crore and a loss of Rs.77.6 crores.
Lastly, the company presently manipulates about 270 channels and it targets to expand it up to 700 outlets by 2026. However, the firm was about to set-up its IPO in March but the COVID-19 pandemic derailed their plans.