Burger King share price hits lower circuit of 10% for second consecutive day

Burger King share price: After debuting on markets, the stock almost doubled investors' money. In fact, even after listing stock prices doubled in just a few sessions. Due to this, some investors decided to book some profit and the stock has slipped from the highs of all-time highs of Rs 213.8 to Rs 175 (down by 10%, lower circuit). Today again due to some strong selling the stock has again hit a lower circuit of 10% at Rs 157.5. There are only sellers in the system and no buyers for the stock. This indicates that the stock price has fallen over 25% from the highs made yesterday. The current market cap of the company is over Rs 6000 cr.

The IPO of Rs 810 cr of Burger King India was subscribed 156.65 times by the investors across categories. The retail individual investors segment of the Burger King IPO was subscribed over 68 times. This indicates the confidence retail investors have on the future prospects of Burger King and they feel that the company is fairly priced at current levels to give them decent returns on the listing day. The Burger King IPO portion meant for qualified institutional buyers (QIBs) was subscribed close to 87 times and non-institutional investors 354 times. The issue received bids for 1166 cr equity shares against the offer size of 7.44 cr shares. Major of the brokerages, fund houses and analysts had a Subscribe rating on the stock.  

As the national master franchisee of the Burger King brand in India, the company has exclusive rights to develop, establish, operate and franchise Burger King branded restaurants in India. The company’s master franchisee arrangement provides them with the ability to use Burger King’s globally recognized brand name to grow its business in India while leveraging the technical, marketing and operational expertise associated with the global Burger King brand. 

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The food services market in India has shown consistent growth since FY2014 and was estimated at Rs 4096 bn in FY2019. The organized food services market in India (chain and standalone outlets, excluding restaurants in hotels) was estimated at Rs 1600 bn in FY2020. The QSR segment stands at Rs 348 bn (CAGR of 17% over FY2015-FY2019). The growth of chain QSR is primarily driven by international brands such as Domino’s Pizza, McDonald’s, Burger King, KFC, and Subway, which combined account for approximately 45% of the total chain outlets in India. Some of the key near-term growth levers are improving demographics (rising young population and growing urbanization), trend of increasing eating out, rising trend of online ordering, and higher traction for value meals.