Burger King’s 810 crore initial public offering received a solid response from investors across all categories and was subscribed 156.65 times.
Burger King India shares were up 20% to finish at Rs 166.05 each on BSE today, following a strong stock exchange debut on Monday. The stock has skyrocketed nearly 131% from the issue price of Rs 60 each in the previous session. With today’s share price rally, Burger King India’s share price has now risen 176.75% from the IPO price while its market cap stands at Rs 6,337.37 crore. “At current prices, valuations appear to be fundamentally very tight. Technically, 160 remains a strong resistance. Investors are advised to book at least a portion of profits as a sharp correction up to 130-115 cannot be ruled out, “Abhijeet Ramachandran, independent analyst / co-founder and trainer at Tips2Trade, told Financial Express Online.
The listing meets expectations
Burger King India’s shares were listed at a 92% premium over the issue price. Most analysts and brokerage firms had recommended “signing up” for Burger King India’s IPO to gain from the listing. According to analysts at Angel Broking, Burger King India’s listing was in line with expectations as the price of the issue was discounted relative to listed competitors such as Jubilant FoodWorks (Domino’s Pizza) and Westlife Development (McDonald’s).
Short-term profit vs long-term investment
Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, said short-term investors can see profits. “We advise long-term investors to stay invested in the company as the company has ample scope to grow its business in India,” Lahoti said. Lahoti also said that the company should also gain market share in the future by opening more stores than its competitors. “As the number of stores increases, the operating leverage will take effect and the company will be able to report profits and lead to a revaluation of the multiple for the shares,” he added.
The listing of Burger King India shares is the fourth best listing in 2020. The Rupee 810 crore Initial Public Offering (IPO) received a solid response from investors of all categories and was subscribed 156.65 times. So far, Chemcon Specialty Chemicals has grown the most on the day of its stock debut, earning 114% from the issue price, followed by Happiest Minds Technologies with 111% listing gains and Route Mobile with a 104% premium on listing day .
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