Burger King India Limited IPO is all set to hit the market in 2020, an year full of uncertainty both for the financial markets as well as the common masses. Coming to the point, through this post we’ll have an exclusive Burger King India Review discussing its IPO size, date, price range, company details, financials and much more.
Burger King India: Details
One of the fastest growing international QSR chains, Burger King has been performing in the Indian market more than adequately during the past few years of their operations based on number of restaurants. QSR, the national franchisee of the BURGER KING® India, have exclusive rights to develop, establish, operate and franchise Burger King and its associated branded restaurants in India.
The company, having opened its first restaurant way back in November 2014, has used its well defined parameters for restaurant roll out and development process, and has used that to achieve its goal of growing quickly, consistently and efficiently with ease, into a PAN-India QSR chain. Needless to say it capitalised on the growing market opportunity for fast food in India, especially for QSR restaurants.
As of June 30, 2019, QSR had 202 restaurants, which included seven Sub-Franchised Burger King restaurants, spread across in over 16 states, union territories and more than 47 cities across India. QSR depends on strategies like cluster approach and penetration strategy to map the location of its upcoming restaurants, and the strategy has been successful so far.
Burger King India: Business Strategy
Primarily, it launches its brand partnered restaurants in flagship locations which are high in traffic and high visibility locales, which are mainly situated in key metropolitan areas and cities across India. The second step to this would be to develop more new restaurants in that particular cluster. Not only this process helps with customer acquisition process, this also helps it to efficiently manage its vertically managed and scalable supply chain and drive down costs.
Now moving further and talking about the Burger King (India) IPO, the Indian franchise is set to go public and raise funds soon.
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Burger King IPO: Objectives
The prime objectives of this IPO issue include:
- Raising money for rolling-out a range of new Burger King restaurants and
- A series of different general corporate purposes.
Burger King IPO Dates
The opening and the closing date of Burger King IPO is, at the moment, not known. But it is highly likely to happen within this year. And, we’ll update that soon.
| Bid Opens | Dec 2, 2020 |
|---|---|
| Bid Closes | Dec 4, 2020 |
| Final Allotment | Dec 9, 2020 |
| Refund Initiation | Dec 10, 2020 |
| Credit of Shares | Dec 11, 2020 |
| IPO Shares Listing Date | Dec 14, 2020 |
Burger King IPO Size
Burger King is probably one of the, if not the largest self-service restaurant chains in India. Approximately, it has 202 outlets spread across in over 47 cities. Primarily, the company is planning to raise around Rs. 1000 crores through a mix of an offer for sale and a fresh issue of equity shares. The idea is that the promoter of the company i.e. QSR Asia Pte Ltd. will get an exit through the offer for sale.
The fresh issue of Equity Shares aggregating up to Rs. 4,000 million by their Company, however the denomination that it would be broken in is yet unknown, i.e. number of shares are yet unknown.
The company is in consultation with the BRLMs, and after several delays in IPO date is considering a Pre-IPO Placement. The amount of this would be such that the number of issued shares, for cash, would aggregate to a total of to Rs. 1,500 million. There is a huge probability that the company may do this prior to filing of the Red Herring Prospectus with the Registrar of Companies. The issue price would depend on a variety of factors, which would include determination thr0ugh qualitative and quantitative factors, the entire process aided by Lead manager who is in consultation.
If, however, the company chooses to go with a pre-IPO placement, then the number of equity shares might change drastically, that are available to general public. However, this would still be subject to regulatory requirement of minimum 10 % of the total issued shares of the company being available to people at large, to avoid any consolidation.
| Burger King India | IPO Details |
|---|---|
| IPO Size | 135,000,000 Eq Shares of ₹10 (aggregating up to ₹810.00 Cr) |
| IPO Type | Book Built Issue IPO |
| Face Value | ₹10 per equity share |
| Price Band | ₹59 to ₹60 per equity share |
| Minimum Lot Size | 250 Shares |
| Maximum Lot Size | 3250 Shares |
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Burger King IPO: Promoters
The primary promoter of this Burger King India happens to be QSR ASIA PTE. LTD.
Burger King India: Key Managerial Personnel
- Sumit P. Zaveri, Chief Financial Officer
- Ranjana Saboo, Company Secretary
- Abhishek Gupta, Chief of Business Development and Operations
- Namrata Tiwari, Chief People Officer
Burger King IPO: The Company Overview
In this IPO issue, it has been decided that the lead manager to the issue would be Kotak Mahindra Capital Company Limited, CLSA India Private Limited, Edelweiss Financial Services Limited and JM Financial Limited and the Registrar is Link Intime India Private Limited.
Burger King, one of the biggest globally recognised brand, also known as the “HOME OF THE WHOPPER®”, was established in 1954 in the United States of America. It is owned by The Burger King Corporation, which itself is a subsidiary of Restaurant Brands International Inc. This company holds, in its portfolio a number of globally recognised fast food brands that include the BURGER KING®, POPEYES® and TIM HORTONS® brands.
The brand, second only to McDonalds’s in the fast food burger business, has globally, over 18,000 restaurants in more than 100 countries and U.S. territories. Needless to say the vast global empire has tie-ins with several big companies. Within India, they have about 202 restaurants, which includes seven sub-franchised restaurants which are spread across 16 states and also union territories, in over 47 cities across India. They have about 216 Company-owned restaurants and 8 sub-franchised restaurants. A big number indeed!
Burger King IPO Review: Factors to be Considered
While this can be said to be one of the most anticipated and trending IPOs of the year, the bar was not very high to begin with. However, while you decide whether or not to invest in Burger King IPO, 2020, there are crucial factors that you should consider while deciding that. These can be divided into two parts:
1. Qualitative Factors:
- The company, being a global behemoth, is obviously well known. And, that surely adds to any investors’ interest. Right!
- The brand has also been operational for more than 5 decades, so it also happens to be increasing the reliability factor.
- The underlying company, QSR, has exclusive national franchise rights in India.
- Needless to say, the brand does have a strong proposition against its competitor, one of whom happens to be McDonald’s.
- In terms of positioning, the brand, unlike its competitors that promote family values, has a branding strategy guided specifically for its target market, the infamous 18-34.
- In terms of supply chains and processes, all the processes are scalable and the supply chain is vertically managed.
- The company is tech-savvy in its processes, however does contribute to employment significantly and has a people centric operating culture.
2. Quantitative Factors: Company Financials (INR Crore)
This is another aspect to look at while thinking of investing in an IPO. You need to have some basic financial knowledge to understand the financial data of a company and estimate its growth prospects based on it.
Let’s take a quick look at the financial performance of the company over the years:
| 2017-18 | 2018-19 | 2019-20 | Q1 FY 2020 | |
|---|---|---|---|---|
| Revenue | 234.1 | 388.7 | 644.1 | 214.3 |
| Expenses | 306 | 471 | 682.4 | 216 |
| Net income | -71.8 | -81.4 | -38.6 | -2.1 |
| Net margin (%) | -30.7 | -20.9 | -6 | -6 |
As it is visible, the revenue of the company is rising steadily, so the company is growing in size. But when we look at the net income and net margin, it is falling steadily, indicating a probability of improper cost management, or huge capital investments. Of course, there may be other reasons to it.
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The Bottom Line
Burger King IPO has been in the news for a while now, and the IPO has been delayed several times. Nevertheless, it is still one of the most awaited IPOs of 2020 and the company is a reliable brand. Don’t you think so?
Are you ready to invest in the Burger King IPO? What are your thoughts on it? Feel free to discuss any queries on the Burger King India IPO, its pricing, listing and other details in the comment section.