If you have been lucky enough to be allotted Burger King shares after it received strong investor interest, you may be wondering how it would perform on the listing day i.e. on December 14, 2020.
Primarily, the listing gains or losses to an extent are also determined basis the counter's price in the grey market. And for this QSR counter, the grey market premium on Friday was at a whopping 75% higher than the issue price. And this is as per the IPOcentral site, where the issue is said to command a premium of Rs. 44-Rs. 45 in absolute terms.
And the reason primarily boosting the grey market premium are the strong financial of the company as well as the strong response that the issue garnered from different investor category i.e. 156.65 times. The portion set aside for retail investors had seen a subscription of 68.15 times, qualified institutional buyers' portion was at 86.64 times and non-institutional investors' portion was at 354.11 times.
From the Rs. 810 crore issue, proceeds shall be put partly for expansion and remaining for debt repayment.
So, as is suggested by the grey market boost up, the counter of Burger King may see strong listing gains.
"Burger King is in the race to take advantage of India's fast growing QSR industry as well as the shifting trend towards organized sector. Now the debt to equity ratio is comfortable at 0.8x and the cash flow from operations has improved from the negative territory to Rs 112.7 crore in FY20. At 2.7x P/Sales, Burger King is relatively cheap compared to 10.4x P/Sales and 6.32x for Jubilant Foodworks and Westlife Development respectively," Nirali Shah, Senior Research Analyst at Samco Securities said.