Should you subscribe to the Burger King IPO?: Advice from analysts


LAST UPDATED: Dec. 2, 2020, 1:45 p.m.

New Delhi (Anish Yande): Burger King India has commenced its initial public offering from today. The bid can be issued in the price band of 59-Rs 60 per share. One bid would contain 250 shares of the Burger King IPO. 250 shares are equal to 1 lot, where an individual can apply for a maximum of 18 lots. Check whether you should subscribe to the BKI IPO according to investors here.

Burger King IPO Issue Size and Price:

The company is planning to raise Rs 810 crore through the sale of shares at the higher end of the price band.  On Tuesday, Burger King India raised Rs 364.5 crore from anchor investors. These anchor investors are HDFC Trustee Company Ltd, ICICI Prudential Mutual Fund, Sundaram Mutual Fund, SBI Mutual Fund, and Integrated Core Strategies Asia Pte Ltd.   

The managers of the share sale are Edelweiss Financial Services, CLSA India, Kotak Mahindra Capital Company, and JM Financial. The company shares would be listed on BSE and the NSE. 

Analysts on whether you should subscribe to Burger King India IPO:

Analysts have brought up strengths of Burger King India such as a strong model for franchises, several plans for store expansion, and negative working capital for Burger King India’s growth and growth in prospects of quick-serve restaurants. According to analysts, the near-term financials for the upcoming fiscal year of Burger King could be under pressure.

Analysts are suggesting a subscribe rating for the IPO due to these reasons. 

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Analysts such as ICICI Securities have said that they believe BKI

has strong growth prospects due to the changing habits with regards to ordering food. They mentioned how the company scaled operation margins to twice the original amount. The analysts cautioned against the loss at the bottom line level for Burger King India.

Experts from Angel Broking said that Burger King India had opened 268 stores in the past six years in India. According to estimates from Angel Investing, the company management would be able to open 700 stores by 2026. The analysts believe that as the number of stores increase, BKI would be reporting profit consequently. There is significant scope for growth, the analysts said. 

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