Burger King sets share sale price band at ₹59-60 a piece

The company will sell new shares worth ₹450 crore to the public, while promoter entity QSR Asia Pte Ltd, owned by private equity firm Everstone Group and its limited partners, will sell up to 60 million shares worth ₹360 crore at the upper end of the price band. Post the IPO, the promoter entity will hold 52.9% in the company.

Quick service restaurant chain Burger King India Ltd Friday set a price band of ₹59-60 per share for its ₹810 crore initial public offering (IPO) opening on December 2.

Burger King India said in its red herring prospectus that it will use the funds to repay existing debt and finance capital expenditure for new company-owned stores. (Bloomberg)

The company will sell new shares worth ₹450 crore to the public, while promoter entity QSR Asia Pte Ltd, owned by private equity firm Everstone Group and its limited partners, will sell up to 60 million shares worth ₹360 crore at the upper end of the price band. Post the IPO, the promoter entity will hold 52.9% in the company.

Burger King India said in its red herring prospectus that it will use the funds to repay existing debt and finance capital expenditure for new company-owned stores. The company has raised pre-IPO funding of ₹92 crore from public markets investor Amansa Investments Ltd at ₹58.5 per share. Burger King India said it holds a master franchisee arrangement, which provides it with the flexibility to tailor its menu to Indian tastes and preferences, as well as its promotions and pricing.

Burger King’s IPO comes at a time of resurgence in Covid-19 cases in certain parts of the country, giving rise to concerns that local authorities might impose new restrictions. Most of its outlets across the country are now operational. Shifting demand from the unorganised sector to the organised sector and easing real estate prices will open up opportunities for the company, which is well-financed and has a good team in place, chief executive officer Rajeev Varman said. The company expects 70% of its growth to come from the 50-plus cities where it is already present, Varman said, “One, to penetrate enough so that we are convenient for the customers there, but to also bring some synergies and some economies of scale on distribution expenses, operational overheads and so forth.”