{"id":272,"date":"2019-12-26T10:12:19","date_gmt":"2019-12-26T10:12:19","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=272"},"modified":"2019-12-30T09:21:21","modified_gmt":"2019-12-30T09:21:21","slug":"all-you-need-to-know-about-burger-king-india-ltd-ipo","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/","title":{"rendered":"The most-awaited Burger King India Ltd IPO"},"content":{"rendered":"\n<p>Though Burger King ? made a late entry in the Indian Quick Service Restaurant (QSR) market, its success has been commendable. So much so that, within just 5 years of entering the market, the Miami-based burger joint has announced its plan of going public in 2020. To seek approval for issuing <a href=\"https:\/\/www.tickertape.in\/blog\/ipo-investment\/\">IPO<\/a> worth Rs400cr, Burger King India Ltd submitted the Draft Red Herring Prospectus with <a href=\"https:\/\/www.tickertape.in\/blog\/securities-and-exchange-board-of-india-functions-powers-and-regulations-of-sebi\/\">SEBI<\/a> on 4<sup>th<\/sup> Nov 2019.<\/p>\n\n\n\n<p>Before getting into how Burger King India plans to utilise the IPO proceeds, let us look at the history of the burger giant in the country.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Burger-King-in-India-the-journey-so-far\" title=\"Burger King in India: the journey so far\">Burger King in India: the journey so far<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#A-stellar-entry\" title=\"A stellar entry\">A stellar entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Challenges-that-followed\" title=\"Challenges that followed\">Challenges that followed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#The-various-solutions\" title=\"The various solutions\">The various solutions<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Financial-performance-of-Burger-King-in-India\" title=\"Financial performance of Burger King in India\">Financial performance of Burger King in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Fast-forward-Burger-King-India-Ltd-IPO\" title=\"Fast forward: Burger King India Ltd IPO&nbsp;\">Fast forward: Burger King India Ltd IPO&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#What-does-Burger-King-India-Ltd-IPO-mean-to-its-stakeholders\" title=\"What does Burger King India Ltd IPO mean to its stakeholders?\">What does Burger King India Ltd IPO mean to its stakeholders?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Plans-for-utilising-IPO-funds\" title=\"Plans for utilising IPO funds\">Plans for utilising IPO funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/all-you-need-to-know-about-burger-king-india-ltd-ipo\/#Challenges-to-the-Burger-King-in-India-Ltd-IPO-National-Master-Franchise-and-Development-Agreement\" title=\"Challenges to the Burger King in India Ltd IPO: National Master Franchise and Development Agreement\">Challenges to the Burger King in India Ltd IPO: National Master Franchise and Development Agreement<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Burger-King-in-India-the-journey-so-far\"><\/span><strong>Burger King in India<\/strong><strong>: the journey so far<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>5 years ago, on 9th Nov 2014, Burger King India launched its first restaurant in South Delhi\u2019s upscale neighbourhood Saket. This move made it a direct competitor of McDonald\u2019s , the market leader, who along with others such as Starbucks and Fatburger had already penetrated well into the Indian market.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A-stellar-entry\"><\/span><strong>A stellar entry<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Nevertheless, Burger King India planned a remarkable strategy, which marked its iconic entry in the Indian shores. Even before the launch of its first restaurant, the burger joint created a hype of its super-sized &#8216;Whopper burger&#8217; ? by allowing potential customers to pre-order the snack online at a promotional price in partnership with eBay India. In addition, it also gave out Burger King merchandise that customers could redeem on a Sunday that followed. These moves garnered the new player lakhs of fans all over social media.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Challenges-that-followed\"><\/span>Challenges that followed<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>However, the parent company was gripped with several challenges at the global front for reasons such as controversial advertisements, high pricing, and losing differentiations. And although, Burger King justified the high prices by claiming that it offered crunchier and quality patty compared to McDonald\u2019s, this strategy wouldn\u2019t have worked well in India, for mainly two reasons.<\/p>\n\n\n\n<p>First, Indians perceived burger joints as a snacking destination rather than a meal joint. Second, at the time, the Indian food market was largely unorganized and mostly comprised street food stalls and roadside sellers, which accounted for 70% ($33.7 billion) of the sector. This meant the average Indian customer wouldn\u2019t bother spending beyond their current limit on a relatively new offering.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The-various-solutions\"><\/span>The various solutions<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Burger King India did what it had to do to survive: reduced prices \u2b07\ufe0f, which was a smart way to attract Indian consumers from local joints that offered plenty of eating options at pocket-friendly prices. But Burger King India didn\u2019t stop at that; it took a step forward and offered prices more or less at par with McDonald\u2019s. Here\u2019s a chart that shows Burger King India\u2019s pricing strategy to compete with McDonald\u2019s.<\/p>\n\n\n\n<iframe loading=\"lazy\" width=\"600\" height=\"400\" src=\"https:\/\/live.amcharts.com\/lmODE\/embed\/\" frameborder=\"0\"><\/iframe>\n\n\n\n<p>Compared to its biggest competitor\u2019s famed McChicken-fries-beverage combo, Burger King priced its signature flame-grilled chicken combo and chicken chilli at 11% and 5% low. On the Asian market front, the Whopper Burger maker had reduced prices by 89% in India. The competitive marketing strategy of Burger King India also helped it gain customer loyalty.<\/p>\n\n\n\n<p>But slashing its prices to suit the Indian customer\u2019s wallet wasn\u2019t enough. In order to succeed, Burger King India had to also tailor its menu to suit the Indian palate, and local food culture and preference, which was mostly spicy ?\ufe0f and healthy ?. As the next establishment and expansion strategy, Burger King India capitalised on the fact that the majority of Indians were vegetarians ? and designed its menu accordingly. The burger giant offered three vegetarian variants of the Whopper Burger, while giving non-vegetarian consumers the options of chicken and mutton.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Financial-performance-of-Burger-King-in-India\"><\/span><strong>Financial performance of Burger King in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Thanks to its high number of outlets, the burger giant has earned handsome revenues ? in the last 3 years. Though the company is still not green in profitability, it is quite close when you look at its performance in the last 3 years.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Fast-forward-Burger-King-India-Ltd-IPO\"><\/span><strong>Fast forward: Burger King India Ltd IPO&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Since Burger King India looks to be listed in early 2020, it filed the IPO documents with SEBI in November 2019,&nbsp; keeping in mind that SEBI takes 4 to 6 weeks to screen and approve. As per the Burger King India IPO DRHP filed with SEBI, the burger giant plans to offer an IPO of Rs 1,000cr, which will comprise of:<\/p>\n\n\n\n<iframe loading=\"lazy\" width=\"600\" height=\"400\" src=\"https:\/\/live.amcharts.com\/c3MWZ\/embed\/\" frameborder=\"0\"><\/iframe>\n\n\n\n<ol><li>Fresh <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">equity<\/a> shares worth Rs 400cr<\/li><li>Secondary shares worth Rs 600cr sold by the major promoter Evernote Capital<\/li><\/ol>\n\n\n\n<p>all of which will be listed on BSE and <a href=\"https:\/\/www.tickertape.in\/blog\/national-stock-exchange\/\">NSE<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-does-Burger-King-India-Ltd-IPO-mean-to-its-stakeholders\"><\/span><strong>What does Burger King India Ltd IPO mean to its stakeholders?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Previously, notable players and competitors of Burger King India namely, Jubilant FoodWorks ? (operator of Dominos in India) and Westlife Development ? (runs McDonald&#8217;s in the southern and western India) went public. These QSR players are currently trading at high price-to-earnings multiples ?. Similarly, industry experts believe:<\/p>\n\n\n\n<ol><li>Burger King India IPO would attract high valuations due to the investor\u2019s preference for consumer-oriented brands and offer a high premium to existing <a href=\"https:\/\/www.tickertape.in\/blog\/shareholders\/\">shareholders<\/a> (that is precisely why Evernote is liquidating its shares).<\/li><li>Burger King India could revive the sluggish market for IPOs in India. Notably, only 13 companies had filed for IPO this calendar year, which saw a 45% dip year-on-year and the value had reduced by 188% to Rs 10,717cr.<br><\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Plans-for-utilising-IPO-funds\"><\/span><strong>Plans for utilising IPO funds<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Thanks to the number of restaurants that Burger King India has established since its launch 5 years ago, the burger giant is known to be one of the fastest-growing international QSR in India. To fuel its growth further, Burger King India plans to utilise the fresh funds (to the tune of Rs 400cr) raised from IPO.<\/p>\n\n\n\n<p>With this capital, it plans to establish new company-owned Burger King restaurants and also to use it for general corporate purposes. In addition to opening new restaurants, the burger joint also plans on banking upon opportunities offered by the online delivery market. So far, Burger King ? has opened 202 restaurants across 47 cities across India (16 states and UTs).<\/p>\n\n\n\n<p>Capitalising on the fact that India is becoming more acceptable towards consuming food offered by the international fast-food chains, the Whopper-maker plans to open new Burger King-owned restaurants using the net proceeds of the fresh funding of the IPO. By the end of 2020, Burger King looks to launch 325 stores as part of its aggressive growth strategy to outdo the stores run by McD. According to the  Burger King India IPO DRHP, the burger giant looks to use as much as Rs 2.9bn of the IPO raised for this purpose.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Challenges-to-the-Burger-King-in-India-Ltd-IPO-National-Master-Franchise-and-Development-Agreement\"><\/span><strong>Challenges to the Burger King in India Ltd IPO: National Master Franchise and Development Agreement<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>But<strong> <\/strong>the way to growth for Burger King India is not as easy as it seems. To enjoy greater control over operations, corporate affairs, and better growth opportunities, the QSR player had chosen to go with the national franchise instead of a regional one, which is valid until 31st December 2039. Though the master franchise and development agreement give Burger King India various opportunities, it also puts down certain obligations.<\/p>\n\n\n\n<p>For instance, the agreement requires Burger King India to develop and open a minimum of 700 restaurants by 21<sup>st<\/sup> Dec 2025. Failing to do this will terminate the master franchise and development agreement along with the development rights. Considering that Burger King India could only develop 202 restaurants in the last 5 years, establishing 498 more in the next 5 years is challenging.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Read the story of King of Burgers in India so far<\/p>\n","protected":false},"author":27,"featured_media":293,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[9,1727],"tags":[],"acf":[],"modified_by":"Komal Roy","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2019\/12\/Blog-burger-king-IPO1-05-scaled.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/272"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=272"}],"version-history":[{"count":20,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/272\/revisions"}],"predecessor-version":[{"id":430,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/272\/revisions\/430"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/293"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}