Anil Singhvi Strategy on Burger King IPO: Growth, revenue visible, take 'chance' for listing gain, long term investment

Initial Public Offering (IPO) of fast food chain Burger King is opening on 2 December 2020. What should the investors do with this public issue? Should they invest in the shares of this company or not? Zee Business Managing Editor Anil Singhvi gives his incisive take on this!

The Market Guru said that there were certain things which went well for the company, while others which were not so good. The investors who are willing to invest in this IPO should know both the aspects, he added.  

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Positives for Burger King 

The good thing is that it is a strong global brand and that aids the cause of the company. The people who come to India identify with this brand. There is a growth and revenue visibility in this food chain company, Singhvi said. This is a segment which is very popular among the youth. The last four years balance sheets indicate a healthy growth visibility  

Negatives for Burger King 

The company till now has not posted profits, which is a negative for the company, the Managing Editor said adding that the EBIDTA, though is positive for it. The valuation in this IPO could have been better in term of its size and could have been more reasonable from the standpoint of profitability. Though it was not the case that its peers including Jubilant Food and Westlife had cheaper valuations. 

He, however said that the investments are made on growth and revenue prospects and not on immediate profit situation as profits take time to come, he added.  

Anil Singhvi’s strategy on IPO 

The Managing Editor said that investors can take a chance with this company and buy shares for listing gains and long term investment. He said that he expected gains on listing – it could be more-or-less, but chances of a loss are unlikely, he further said. From the long term perspective, Burger King is a good stock to buy.  

There is likely to be a good interest for this IPO among the institutional investors.       

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 Earlier, Burger King’s Chief Executive Officer Rajeev Varman had spoken to Zee Business and said that the company was planning to raise Rs 810 cr from the IPO. The company plans to raise Rs 450 cr from the primary IPO. The secondary IPO is of 60 million shares. At a price band of Rs 59-60, the IPO size will be Rs 360 cr, he had said.   

Also Read - Burger King IPO date and more: What CEO Rajeev Varman told Anil Singhvi about  issue size, expansion and growth  

The issue will close on 4 December and the allotment of shares will take place on 9 December. The company will be listed on 14 December.