All set for Burger King India to go public in 2020

New Delhi’s fast food restaurant Burger King India has filed its Initial Public Offering prospectus. The restaurant is planning to offload up to Rs 400 crore ($56.6 million) of new shares in the listing. The quick food service company is planning to trade its shares on the Bombay Stock Exchange and the National Stock Exchange.

The India-based branch of the United State’s Burger King filed a local prospectus on 4 November 2019 and will be looking to expand regionally in the wake of cut-throat competition in the hotel sector.

The Whooper Burger maker which launched its first Indian restaurant in 2014, faces competition from other industry leaders including the McDonald’s Corp, Domino’s Pizza, and a chain of other upcoming restaurants. However, with the new funding, the restaurant plans to gain an advantage over its competition through expansions and strategic acquisitions across the region.

King Burger’s underwriters include Edelweiss Financial Services, Kotak Mahindra Capital, JM Financial, and CLSA. The listing will pave way for new investors as the majority stakeholder Private Equity firm Everstone Capital will be looking to surrender a part of its stake in the quick service restaurant (QSR).

Sources familiar with the matter told The Business Standard that the India-based Burger King restaurant will finalize its filing in the course of this week. The IPO will feature a secondary share sale worth Rs 600 crore by Everstone Capital and new fundraising worth Rs 400 crore. Burger King India currently runs about 200 outlets across India alone and recently recorded a 66% jump in revenue year-on-year, beating rivals Domino’s Pizza, Starbucks, Pizza Hut and Dunkin’ Donuts. But even with that, annual losses had risen to Rs 62 crore in FY18 from Rs 57 crore in FY17.

If the regulator clears the restaurant within the anticipated 4-6 weeks, investors would be able to buy the company’s shares early next year.

King Burger India’s big rivals are Jubilant FoodWorks and Westlife Development, both of which run Domino and McDonald’s franchises respectively, are now trading at high price-to-earnings multiples having listed much earlier.

Industry insiders are confident that the market will warm up to King Burger India’s IPO thanks to investors’ preference for consumer-backed companies. If that were to be the case, the listing will certainly excite the sluggish Indian IPO market.