Last updated: 01 Dec, 2020 | 01:12 pm
Burger King India is set to raise up to ₹810 crore via IPO which opens on 2nd December, Wednesday. Here are the details:
About Burger King India
About the issue
At the higher end of the price band, Burger King is valued at an attractive 2.7 times Price to Sales ratio, as compared to listed peers Jubilant FoodWorks (P/S of 8.5x) and Westlife Development (P/S 4.4 x). This discounted valuation is justified, as Burger King has not reported a profit in last 3 years, and its outlets are relatively new.
However, the company has seen robust growth in terms of store additions and revenues, and looks to reach 700 stores by 2026 (from 260 currently). Further, the company is repaying around ₹165 cr of debt out of the IPO proceeds, which could help it to become profitable. While the company’s profitability could be under pressure in the near-term, Burger King could turnaround in the next few years as benefits of new store openings and economies of scale kick in. Given attractive valuations (as compared to peers), negative working capital, strong revenue growth and store addition, and robust growth forecast, we remain positive on the prospects of the issue.