Burger King India Ltd., one of the fastest growing quick service restaurant chains in the country, on Monday, filed its draft prospectus for an initial public offering (IPO) with markets regulator, Securities and Exchange Board of India.
The IPO, a combination of fresh issue and offer for sale, looks to raise ₹400 crore as fresh capital while its promoter—QSR Asia Pte Ltd will partially exit via an offer for sale of 6 crore equity shares.
“The total offer is expected to be of ₹1,000 crore, of which the secondary component will be about ₹600 crore through which all its shareholders will exit partially," a preson directly aware of the matter told mint, requesting anonymity.
The firm plans to use ₹290 crore of the fresh capital to roll out new restaurants in the country. It plans to have about 325 restaurants, including sub-franchised outlets by December 31, 2020, according to its draft prospectus.
“We also intend to open restaurants in new areas and markets where we believe there is strong potential for growth and in addition to taking advantage of the growing online delivery market, including through engagement with delivery aggregators," the company said in its draft prospectus.
“This strategy will also help us to efficiently manage our supply chain due to the increased reach and density of our network and the proximity of our restaurants to each other and to the distribution centres of our third-party distributor," it added.
The promoter entity QSR Asia counts F&B Singapore, BK AsiaPac, RV Services Pte. Ltd. and Ajay Kaul, senior director at F&B Asia Ventures Ltd as its shareholders.
F&B Asia, an investment vehicle owned and managed by private equity (PE) firm Everstone Group, also owns Burger King and Domino’s in Indonesia, along with other popular brands including Masala Library, Farzi Café, Pa Pa Ya, Masala Bar, Harry’s, Pind Balluchi and Duck & Rice. The investment firm opened its first Burger King outlet in India in November 2014.
Investment banks Kotak Mahindra Capital, CLSA India, Edelweiss Financial Services and JM Financial have been appointed to advise the company on the IPO.
Burger King India has 216 company-owned restaurants and eight sub-franchised restaurants across 47 cities across India, including Delhi-NCR, Mumbai, Pune, Chennai, Hyderabad, Bengaluru, Chandigarh, Ludhiana, Amritsar and Kochi, according to its draft red herring prospectus.
Its revenue from sale of food and beverages stood at about ₹633 crore as of fiscal year ended 31 March, doubling from ₹378 crore in the previous fiscal. It same store sales grew at 29% as of fiscal 2019. Further, its losses reduced to ₹38 crore as of FY19, compared to ₹82 crore last fiscal. The burger chain’s gross margins stood at ₹400 crore as of 31 March.
Several firms of Everstone’s portfolio have gone public in the last couple of years.
Last May, Everstone-backed non-banking financial company IndoStar Capital Finance Ltd raised ₹1,844 crore through an IPO. In 2017, the PE firm’s education sector-focused publishing company S. Chand and Co. got listed in a ₹728.5 crore IPO.