Burger King India, a quick service restaurant chain, is expected to launch its maiden public offer for subscription next week. The company, after consultation with merchant bankers, has fixed IPO price band at Rs 59-60 per share, which is 5.9-6 times of its face value of equity shares.
The initial public offering will open on December 2 and close on December 4, 2020.
The IPO consists of a fresh issue of Rs 450 crore and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd.
The Indian subsidiary of US-based Burger King aims to raise Rs 810 crore via its public issue, at a higher price band.
The company had undertaken a pre-IPO placement, by way of rights issue, of Rs 58.08 crore at a price of Rs 44 per share to promoter and preferential allotment of Rs 91.92 crore at a price of Rs 58.50 per share.
Hence, as a result, the fresh issue size has been reduced to Rs 450 crore from Rs 600 crore earlier, as per the advertisement of IPO published in newspapers.
The company would utilise fresh issue proceeds for funding roll out of new company-owned Burger King Restaurants and general corporate purposes.
Under the Master Franchise and Development Agreement, the company is required to develop and open at least 700 restaurants (including company-owned Burger King Restaurants and Sub-Franchised Burger King Restaurants) by December 31, 2026, which has recently been extended by one year from December 31, 2025 due to the COVID-19 crisis.
Bids can be made for a minimum of 250 equity shares and in multiples of 250 equity shares thereafter. It means retail investors can apply for maximum up to 3,250 equity shares at higher price band.
The company has reserved up to 10 percent portion of IPO for retail investors, upto 15 percent for non-institutional investors and up to 75 percent for qualified institutional investors.
Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial are the book running lead managers to the issue. Equity shares are expected to debut on bourses around December 14, 2020.