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Burger King India shares fall, hit 10% lower circuit; what should investors do now?

Burger King India share price sharply fell in the afternoon deals today after surging for the last three days. The stock fell to hit the 10 per cent lower circuit at Rs 179.35 apiece today afternoon, after rising in the morning to hit the upper circuit. In the morning deals, Burger King shares were locked in the 10 per cent upper circuit. The company’s market capitalisation has also fallen to Rs 6,844.98 crore from Rs 8,363.96 crore in the morning.

According to an analyst, the rally in Burger King India shares was beyond expectations, and the stock became much more expensive above Rs 200 levels. “The expected profit booking is on cards. The listing day high of 135 may be tested soon. Below 135 one should not hold it in the portfolio,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online.

Burger King India made stock market debut earlier this week with 92 per cent premium over the issue price of Rs 60 apiece. At the current level, Burger King shares are up 55 per cent from the listing price of Rs 115.35 per share, and 199 per cent up from the IPO price. Burger King India’s Rs 810-crore initial public offer was subscribed a massive 156.65 times during the three-day bidding process. During the IPO process, most of the research and brokerage firms had recommended to ‘subscribe’ to Burger King India IPO for the listing gains.

Out of the 12 IPOs that the stock markets witnessed so far this year, Burger King India is among the top four IPOs. From the listing day, Route Mobile shares have gained 221.6 per cent, Happiest Minds Technologies 94.7 per cent while Rossari Biotech stock price surged 94 per cent.

Meanwhile, Mrs Bectors Food Specialities’ Rs 540-crore IPO has also witnessed strong demand from investors across categories so far on the last day of the bidding.

Eqwires Research Analyst

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Laxmi Organic to launch Rs 800-cr IPO following strong listing by Rossari Biotech, Chemcon Speciality

Laxmi Organic Industries is set to raise Rs 800 crore through initial public offer (IPO). The speciality chemicals manufacturer has filed preliminary papers with the capital market regulator Securities and Exchange Board of India (Sebi). Laxmi Organic Industries’ issue will comprise fresh issue of shares aggregating to Rs 500 crore and an offer-for-sale (OFS) worth Rs 300 crore by the promoter Yellow Stone Trust, according to the draft red herring prospectus (DRHP) filed.

The book running lead managers to the Mumbai-based Laxmi Organic are Axis Capital Ltd and DAM Capital Advisors Ltd (formerly known as IDFC Securities Limited), while the registrar is Link Intime India Private Ltd. Laxmi Organic Industries’ plan comes after the recent success and fundraising by specialty chemical companies, Rossari Biotech and Chemcon Specialty Chemicals, which were subscribed almost 80 times and 149 times respectively. Moreover, Chemcon Speciality Chemicals has witnessed the best share market listing, gaining 114 per cent from the IPO price, so far in 2020.

Laxmi Organic Industries is a leading manufacturer of acetyl intermediates and specialty intermediates. According to the draft red herring prospectus (DRHP), net proceeds from the issue will be utilised for setting up of a manufacturing facility for fluoro specialty chemicals, working capital requirement, and for the purchase of plant and machinery for augmenting infrastructure development. In addition, funds would be used for prepayment or repayment of all or a portion of outstanding loans, besides general corporate purposes. The company will not receive any proceeds from the offer-for-sale. The company has a global presence with customers in over 30 countries including China, Netherlands, Russia, Singapore, United Arab Emirates (UAE), United Kingdom and the United States of America.

The two recently listed specialty chemical companies, Rossari Biotech Ltd shares were trading at Rs 826.60 apeiece, up 0.89 per cent, while Chemcon Speciality Chemicals Ltd shares ended 0.79 per cent up at Rs 432.50 apiece. In comparison, S&P BSE Sensex ended at 46,666, up 0.87 per cent, at an all-time high closing level.

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IEX expands Green Market; Adds daily, weekly contracts

Indian Energy Exchange (IEX) on Friday announced the expansion of its Green Market with the launch of new contracts that will offer greater choice to market participants to buy renewable energy on the same day and up to 11 days ahead.
IEX has expanded its delivery-based Green Market with the launch of two new products – Green Daily Contract and Green Weekly Contract, an IEX statement said. According to the statement, trading in the new contracts in both solar and non-solar segments will commence with immediate effect.

With this launch, the IEX Green Market now has four contracts, and offers greater choice to market participants to buy renewable energy on the same day and up to 11 days ahead. In a first for IEX Green Market, the Daily and Weekly contracts, will enable market participants to trade in on energy basis (MWh) with the bidding taking place on a 15-minute time-block.
The trading in energy terms will help to address the intermittency issues involved in renewable energy procurement.

Further, this will also assist market participants to minimise deviations as well as related penalties. Energy will be delivered leveraging the national, regional and state level transmission network. The Green Market at IEX, a first of its kind initiative in the country, was formally launched by Power Minister R K Singh on September 1, 2020. The market has received encouraging response from all stakeholders and has cumulatively traded 459 MU (million units) comprising 404 MU under Solar and 55 MU under Non-Solar segments within 100 days since the commencement of trading on August 21, 2020.

Moreover, it stated that with an average price of Rs 3.47 per unit in solar and Rs 3.77 per unit in non-solar segments, the market offers an attractive avenue to participants for renewable energy procurement. “India is witnessing a rapid change in the energy sector with renewables driving the energy shift. To meet our ambitious renewable energy targets and sustain the existing pace of growth in renewable capacity addition, there is a need for a market-based framework.” IEX Chairman S N Goel said.

IEX Green Market allows the obligated entities to meet their Renewable Purchase Obligation as well as facilitates efficient and seamless integration of the renewable energy. With a total of 36 market participants, the platform is being leveraged by the distribution utilities, renewable generators and open access consumers.

The utilities from the States and Union Territories of: West Bengal, Haryana, Dadra and Nagar Haveli (DNH), Daman & Diu, Delhi, Bihar, Maharashtra, Delhi, UP, Telangana and Karnataka amongst the top market participants on the IEX

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Burger King India IPO: Listing gains in offing; retail quota subscribed over 17 times so far

Burger King India initial public offer (IPO) received a robust response from retail investors on the day one of the bidding process. The Rs 810-crore issue received bids for 26.46 crore shares against 7.44 crore equity shares on offer, implying an overall 3.53 times subscription, so far. Most of the brokerages suggest to subscribe to one of the fastest growing international QSR chains in India for the listing gains. The issue is being sold in the price band of Rs 59-60 apiece. Link Intime India Pvt Ltd will manage allocation and refund of the issue and is the registrar of Burger King India IPO.

According to the exchange data, retail portion saw 17.64 times applications as retail had the lowest allocation quota of only 10 per cent. While, non-institutional investors (NIIs) and Qualified Institutional Buyers (QIBs) bid for 75 per cent and 17 per cent, of their respective quotas. These two categories usually subscribe the most on the last day of the three-day bidding process. Burger King India has reserved up to 75 per cent of the issue for QIBs while 15 per cent for NIIs.

Subscribe to Burger King India for listing gains

Analysts at GEPL Capital recommend to ‘subscribe’ to Burger King India IPO for listing gains. At the upper price of Rs 60, the offer is priced at 14.8x FY20 CFO (cash flow from operations) per share. “As a long-term investment, we would wait a few quarters for signs of a sustainable recovery in the same-store sales growth and the ability to repay the pending obligations with a sustainable debt to equity,” Gaurav Hinduja, Associate Analyst at GEPL Capital said.

Research and brokerage firm Motilal Oswal Financial Services has also suggested to subscribe to the issue for listing gains. The brokerage firm said that considering Burger King India’s strong brand positioning, robust store expansion plans and the bright growth prospects of the QSR industry in India, it expects its financials to improve going ahead. The net debt/equity as of Sep’20 stood at 3.3x which post IPO will reduce to zero.

Burger King is one of the fastest-growing QSR businesses in India; it has been growing at a CAGR of 98% over 5 years bearing Covid-19 impacted quarter. “We, therefore, expect the growth trajectory will continue and its financial position to improve going ahead. Therefore, we recommend to subscribe over the issue,” said analysts at Dealmoney Securities.

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