Burger King India IPO Performance

December 2, 2020 IPO 4 min read

The much-anticipated IPO of the Indian unit of the US-based quick service restaurant (QSR) Burger King opened for subscription today. The public offer has been drawing considerable attention from Dalal street participants, in part for its attractive valuations.

The grey market premium (GMP) for the fast-growing QSR restaurant has risen to as high as 56 percent, in the days leading up to the offer.

Singapore based QSR Asia Pte Ltd, holds exclusive rights to develop and operate Burger King branded restaurants in India; in return, Burger King India is required to pay a monthly royalty of 4 percent to 5 percent of the revenue and a one-time store-opening fee of USD 25,000 to Burger King Asia Pacific.

Burger King India is a well-recognized brand and finds itself in favor of its India specific menu and a broad variety of products across price points.

At present, Burger King India operates 261 outlets up from 12 back in 2015; with plans abound to add more in the coming months. Despite being a late entrant to the Indian market, they have been competing aggressively with the likes of McDonalds, Subway, and Domino’s has grown remarkably since its inception about over half a decade ago.

The company saw its revenue zoom at a CAGR of 50 percent over FY 2018 to FY 2020, essentially doubling within this short span of time.

Although the pandemic has drastically hit its operations in this financial year, with revenue tanking over 68 percent over the previous year, optimism about the company remains high, given the huge growth potential of the QSR market still and the fact that Burger King just concerns meager 4 percent of the market.

Details of the IPO

  • The total issue size of the IPO is INR 810 crores that open for subscription today and will remain so until the end of Friday (2nd – 4th December 2020)
  • The price band for the subscription has been set between INR 59-60 apiece, with a lot size of 250 shares. That means one lot would cost somewhere around INR 15,000
  • 75 percent of the issue will be reserved for Qualified Institutional Buyers (QIB). While only 15 percent is reserved for Non-Institutional Investors (NII) and just 10 percent for retail investors
  • Of the total issue size, INR 450 crores are a fresh equity issue and the rest is an offer for sale by the promoter entity, QSR Asia. They plan to sell 60 million equity shares worth INR 360 crores at the upper end of the price band. Post that sale, QSR Asia, the promoter entity will hold about 52.9 percent of the company
  • The allotment will happen on the 9th of December, with 14th December being the listing date
  • The proceeds from the issue will be used to repay existing debt and to set up new company-owned Burger King restaurants
  • The company has raised pre-IPO funding from Amansa investments at INR 58.5 per share, amounting to INR 91.92 crores




Price band (per share) Rs. 59 – 60 per share
Opening date of the offering 2nd December 2020
Closing date of the offering 4th December 2020
Face Value Rs. 10 per share
Bidding Lot 250 shares and multiples of 250 shares thereafter
Listing NSE & BSE
Source: Burger King India DRHP,Tavaga Research

Financials of the company

The fact that the company has seen impressive growth over the past couple of years and the perception that it will continue to challenge the established players has been driving investors’ interest in Burger King. The company is yet to report profitability after tax.

Financials of the company

Financial Year

Gross Sales (INR Crores)

Profit After Tax (PAT) (INR Crores)

H1of FY21 135.2 -116.8
FY 2019-20 841.1 -76.7
FY 2018-19 632.7 -38.3
FY 2017-18 378.1 -82.2

Source: Burger King India DRHP, Tavaga Research

However, the company has consistently improved its gross margin from around 62 percent in FY 2018 to 64 percent in FY 2020. During the same period, it also saw its earnings before interest, tax, depreciation, and amortization (EBITDA) grow from INR 8 crores to INR 104 crores. Its average order value stood at INR 500-550 and the average daily sales per store at INR 1.15 lakh.

Comparison with peers

Burger King



No of Store (30th September 2020) 261 311 1354
Revenue (31st March 2020) 841.7 Cr 1547.79 Cr ~3880 Cr
Gross Margin 64-65 percent 64-66 percent 77-78 percent
Royalty 4-5 percent 4-5 percent 3-4 percent
Advertisement 5 percent 5-6 percent 4-5 percent
Store EBITA 12-14 percent 13-15 percent 21-23 percent
Average Store Size (in Square Foot) 1300-1400 2600-3200 1400-1600
Store build and opening CAPEX 2-2.5 Cr 3.5-4 Cr 1.5-2 Cr
Market Share (by Revenue) 5 percent 11 percent 21 percent
Average Ticket Size INR 500-550 INR 550-600 INR 500-550

Source: News Reports, Tavaga Research

How has the IPO performed on Day 1?

Burger King India IPO’s overall subscription has been 3.13x on day 1, out of which the retail individual investor subscription has been 15.5x, that of QIB’s is 0.17x and NII’s is 0.71x.

The interest shown by retail investors for Burger King India IPO is indeed startling!

How to apply for Burger King India IPO through Trade Smart?

Trade Smart customers can avail the online facility to apply for the Burger King India IPO using UPI. Trade Smart customer will have to log in on the link mentioned below and submit the IPO application;

The IPO can be subscribed from this link: https://box.tradesmartonline.in/report/ipo

Disclaimer: Tavaga has no recommendation on the ongoing IPO of Burger King India.

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