Burger King IPO to open on December 2; price band fixed at ₹59-60 per share
The company has reserved up to 10% portion of IPO for retail investors, up to 15% for non-institutional investors and up to 75% for qualified institutional investors
Quick service restaurant (QSR) chain Burger King will hit the capital markets on December 2, and the price band of the initial public offering (IPO) has been fixed at ₹59-60 per share.
The proposed IPO will see the Indian subsidiary of the U.S.-based Burger King raise ₹810 crore, comprising a fresh issue of shares amounting to ₹450 crore, the company said at a virtual road show. Promoter entity QSR Asia Pte Ltd will sell up to 6 crore shares, aggregating to ₹360 crore at the upper end of the price band, it added.
The company had undertaken a pre-IPO placement, by way of rights issue, of ₹58.08 crore at a price of ₹44 per share to promoter and preferential allotment of ₹91.92 crore at a price of ₹58.50 per share.
Hence, as a result, the fresh issue size has been reduced to ₹450 crore from ₹600 crore earlier, Burger King India CEO and member of board Rajeev Varman told PTI.
The funds raised will mainly be utilised for expansion of company-owned stores across the country and paying off of debts.
Mr. Varman said that under the Master Franchise and Development Agreement, the company is required to develop and open at least 700 restaurants (including company-owned Burger King Restaurants and Sub-Franchised Burger King Restaurants) by December 31, 2026.
It has been recently extended by one year from December 31, 2025, due to the COVID-19 pandemic.
“Currently, we have 268 stores, of which 8 are franchise mainly located at airports and the rest are company-owned. The expansion will mainly consist of company-owned stores,” Mr. Varman said.
Currently, Burger King has a strong presence in the north, followed by west, south and the eastern parts of the country.
This expansion will be focussed on strengthening the existing markets, he added.
By extrapolation, Burger King, which employs an average 20-25 people per store, is likely to generate an employment opportunity for additional 8,640-10,800 persons with this expansion.
Currently, the QSR chain employs 4,836 people, including its restaurants and corporate office.
Bids can be made for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter, which means that retail investors can apply for maximum up to 3,250 equity shares at higher price band.
The company has reserved up to 10% portion of IPO for retail investors, up to 15% for non-institutional investors and up to 75% for qualified institutional investors.
Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial are the book running lead managers to the issue. Equity shares are expected to debut on bourses around December 14.
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