Burger King IPO, Should You Subscribe or Just Eat?

Reading Time: 6 minutes


Offer Details

Price band

Rs. 59 – Rs. 60

Offer Open Date

Dec 02, 2020

Offer Close Date

Dec 04, 2020

Credit of Shares to De-mat A/C

Dec 11, 2020

IPO Shares Listing Date

Dec 14, 2020

Lot Size


Face Value


Issue Size

Rs.810 Cr

Fresh Issue

Rs. 450 Cr

Offer for Sale

60,000,000 Equity Shares of ₹10 (aggregating up to Rs. 360 Cr)

Issue Type

Book Built Issue IPO

Lead Managers

CLSA India, Edelweiss, JM Financial, Kotak

Issue Registrar

Link Intime India Private Ltd



Promoter of the Company


Capital Structure

Pre-Issue Promoter Share Holding


Post-Issue Promoter Share Holding


Company Profile

Burger King is the fastest growing international QSR chains in India during the first five years of operations based on number of restaurants as per Technopak. The globally recognised Burger King brand, also known as the “HOME OF THE WHOPPER®”, was founded in 1954 in the United States and is owned by Burger King Corporation, a subsidiary of Restaurant Brands International Inc., which holds a portfolio of fast food brands that are recognized around the world that include the BURGER KING®, POPEYES® and TIM HORTONS® brands. The Burger King brand is the second largest fast food burger brand globally as measured by the total number of restaurants, with a global network of over 18,000 restaurants in more than 100 countries and U.S. territories as at June 30, 2019.

As of September 30, 2020, BKIL had 261 restaurants, including eight Sub-Franchised Burger King Restaurants, across 17 states and union territories and 57 cities across India. Of our 261 restaurants as of September 30, 2020, 226 were operational. They have the flexibility to tailor menu to Indian tastes and preferences, as well as promotions and pricing.

Company has raised Rs.580.80 million from Promoter through a Rights Issue in May 2020 and Rs.919.20 million from Amansa through Preferential Allotment in Nov 2020.

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Objects of the Issue

  1. To finance the roll-out of new company-owned Burger King Restaurants.
  2. To meet the general corporate purposes.

Business Strategies

  1. To identify new locations in key metropolitan areas and cities across India in order and build out restaurants quickly, consistently and efficiently to capitalise on the growing market opportunity in India for QSR restaurants.
  2. Continue to build on value leadership to drive footfalls and increase same-store sales in their restaurants by menu architecture to offer tailored quality products as per Indian taste and preferences and substantial value at attractive price points.
  3. Offer customers wide entry level menu across burgers, wraps, sides and drinks that is available for under Rs.100, which gives new customers opportunities to access their brand for the first time.
  4. Burger King intend to realise further cost efficiencies and benefit economies of scale by leveraging vertically managed and scalable shared supply chain infrastructure with their third-party distributor, which will drive their gross margins.
  5. Continue to grow brand awareness and loyalty by using integrated marketing approach to target a broad consumer base with frequent and inclusive messaging in social media and mass media channels, such as regular TV commercials, big ticket and high impact media properties.

Competitive Strengths

  1. National master franchisee of the Burger King brand in India, with exclusive rights to develop, establish, operate and franchise Burger King branded restaurants in India.
  2. Strong customer proposition which include value leadership, variety, a wide range of vegetarian offerings, taste advantage and flame grilling expertise.
  3. Positioning of brand to target the large and growing millennial population in India, approximately 60% of Indians eating out are millennials (Age group 15 to 34 years). Millennial population in India has grown from 418 million to 444 million in Fiscal Year 2011 to 2019, and trend is expected to grow further. (Source: Technopak)
  4. They have significant control over the purchasing of its ingredients and packaging materials and have multiple suppliers for most of its key ingredients enabling them to generate competitiveness & help in obtaining the best procurement price.

Financial Highlights

Industry Overview

India remains an underpenetrated Chained QSR market with only 18 Chain QSR restaurants per one million residents in Fiscal 2020, as compared to 175 and 765 in China and the United States as at December 2019.

Growth Drivers for the Industry

Companies in the food services market operate in a variety of locations, including malls, high streets, office complexes, highways, hospitals, airports, etc. Malls and high streets have traditionally been the preferred locations for the food services market. It is estimated that during Fiscal 2018 approximately 20% to 25% of total mall space was leased to food and services market outlets and that by the end of Fiscal 2021 there will be an increase in available space of approximately 2 million square feet for expansion of the food services market in malls in the top seven largest cities in India.

The overall delivery market in India is also expected to grow at a CAGR of 18% to reach US$18 billion by Fiscal 2024 from US$8 billion in Fiscal 2019 (up from US$4.7 billion in Fiscal 2016). Platform to cosumer delivery has shown the strongest growth between both delivery business models, growing at a CAGR of 125% between Fiscal 2016 and Fiscal 2019, a trend that is expected to continue growing at a CAGR of 30% to reach US$12.5 billion in Fiscal 2024 from US$3.4 billion in Fiscal 2019. The table below sets out the split between the online delivery business models in Fiscal 2016, Fiscal 2019 and Fiscal 2024 in US$ billion:

Peer Comparison

Key Risks

  1. Real and perceived health concerns arising from food-borne illnesses, health epidemics, food quality, allergic reactions or other negative food-related incidents could have a material adverse effect on business, results of operations, financial condition and prospects.
  2. Changes in consumer preferences and food habits, which could have a material adverse effect on their business.
  3. Deterioration in the performance of, or company’s relationships with third-party delivery aggregators, may adversely affect their business and thereafter financial condition.
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COVID-19 crisis has adversely affected BKIL ability to open new restaurants and expansion of its restaurant network temporarily. Currently the path to profitability looks blurry for BKIL atleast till the COVID impact normalizes. Moreover the segment is already crowded with many organized/unorganized players that posing tough competition. Investors looking to make listing gains could subscribe to the issue as GMP is 25-30 as exit with in a day or two after listing. While long-term risk-averse investors should avoid the issue and wait for more clarity to emerge as it’s still a loss making company.

Source: DRHP


The author may have positions in the stocks as mentioned in the article above, please assume us to be biased. This is not a recommendation to buy or sell securities. This is purely information about the company mentioned.  Equity investing contain risks and please consult your financial adviser for any buy and sell securities!

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Adroit Financial

Adroit Financial

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