Burger King IPO opens today: Key things to know before you invest

Burger King India IPO opens December 2; price band fixed at Rs 59-60/share

Here are the key things to know before you subscribe to the offer:

- The public issue consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd aggregating to Rs 360 crore.

- The fresh issue size was reduced to Rs 450 crore from Rs 600 crore earlier as the company has undertaken a pre-IPO placement by way of rights issue of Rs 58.08 crore to promoter selling shareholder at Rs 44 per equity share and preferential allotment of Rs 91.92 crore to Amansa Investments at a price of Rs 58.50 per share.

- The company has fixed IPO price band at Rs 59-60 per share, which is 5.9-6 times of its face value of equity shares.

- One can put bids for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter, which means retail investors can apply for maximum up to 3,250 equity shares at a higher price band.

- At a higher price band, Burger King India aims to raise Rs 810 crore via the issue.

- Burger King trades at over 40 percent premium in the grey market ahead of IPO.

- The company has reserved up to 10 percent portion of IPO for retail investors, up to 15 percent for non-institutional investors and up to 75 percent for qualified institutional investors.

- The company intends to use the fresh proceeds from the pre-IPO placement and the fresh issue to further ramp up its restaurant network, and intends to open and develop 700 restaurants by December 2026, thus increasing the restaurant footprint by more than 160 percent in the next 6 years.

- Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial are the book running lead managers to the issue. The company will not receive any proceeds from the offer for sale. All the money will go to the promoter selling shareholders.

- The equity shares are expected to debut on bourses around December 14, 2020.

- Burger King India Limited is the national master franchisee of the Burger King brand in India. It has entered into an agreement with affiliates of Restaurant Brands International for exclusive rights to develop and operate Burger King restaurants in India till 2039.

- Restaurant Brands International is the global owner of a portfolio of highly-reputed QSR brands such as Burger King, Tim Horton’s and Popeye’s. The Burger King brand is the second-largest fast-food burger brand globally, with over 18,600 restaurants across more than 100 countries.

- Burger King India is one of the fastest-growing QSR brands to reach 200 restaurants among international QSR brands in India during the first 5 years of its operations, and currently operates 268 restaurants in 17 states across the country.

The company's revenue from operations rose from Rs 378.1 crore in FY18 to Rs 632.7 crore in FY19 and to Rs 841.2 crore in FY20. However, due to the COVID-19 pandemic, the revenue in the first half of FY21 was just Rs 135.2 crore.

Same-store sales grew at 29.21 percent in FY19 and 6.11 percent in the nine months ended December 2019. Same-store sales decreased by 0.30 percent in FY20 and by 56.9 percent in the six months ended September 2020 primarily due to the impact of the COVID-19 crisis.

The company continued to report losses in last every year but gross margin remained stable around 63.6 percent in the first half of FY21 against 64.2 percent in FY20 and 63.6 percent in FY19.

Shivakumar Pullaya Dega is the Chairman and Independent Director of the company, while Rajeev Varman is the Chief Executive Officer and Whole Time Director.

Shivakumar Pullaya Dega was appointed as an Independent Director of the company in October 2019. He is also currently serving as the Group Executive President for corporate strategy and business development of Aditya Birla Management Corporation.

Ajay Kaul, Amit Manocha, Jaspal Singh Sabharwal and Peter Perdue are Non-Executive Directors on the board, while Sandeep Chaudhary and Tara Subramaniam are Independent Directors.