Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Restaurant Brands Asia / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/beta-kappa-investments-ltd" target="_blank" data-smartkarma-citation="entities:28445:1" rel="noopener">Burger King India (BKI IN)</a> has filed for an IPO with the Securities and Exchange Board of India (SEBI). The initial filing in November 2019 was expected to raise INR 4bn through a fresh issue of up to 60m equity shares, along with a private placement of up to INR1.5bn.
However, on 22nd October 2020, the company filed an addendum to DRHP under which the size of the fresh issue has been increased to INR 6bn. The company has already undertaken a pre-IPO placement through a rights issue of 13.2mn equity shares to the Promoter at INR 44.00 per share, which aggregates to INR 580.8m, reducing the fresh issue size to INR 5,419.2m. Burger King India has mentioned that it may consider undertaking another pre-IPO placement of the remaining amount of up to INR 919.2m.
QSR Asia is the promoter entity and has F&amp;B Singapore, BK AsiaPac, RV Services Pte Ltd and Ajay Kaul (Senior director at F&amp;B Asia Ventures) as its shareholders. Investment banks Kotak Mahindra Capital, CLSA India, Edelweiss Financial Services and JM Financial have been appointed to advise the company on the IPO.
The company plans to use the proceeds from the IPO as follows.
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 374.0pt;">
Particulars
</td>
<td style="width: 79.0pt;">
Amount (INRm)
</td>
</tr>
<tr>
<td style="width: 374.0pt;">
Funding roll out of new Company-owned Burger King Restaurants
</td>
<td style="width: 79.0pt;">
4,322.42
</td>
</tr>
<tr>
<td style="width: 374.0pt;">
Repayment or prepayment of outstanding borrowings of the Company obtained for setting up of new Company-owned Burger King Restaurants
</td>
<td style="width: 79.0pt;">
1,622.42
</td>
</tr>
<tr>
<td style="width: 374.0pt;">
Capital expenditure incurred for setting up new Company-owned Burger   King Restaurants
</td>
<td style="width: 79.0pt;">
2,700.00
</td>
</tr>
<tr>
<td style="width: 374.0pt;">
General corporate purposes
</td>
<td style="width: 79.0pt;">
*
</td>
</tr>
</tbody>
</table>
<div class="content-remarks">
Source: Company disclosures, *to be determined on finalisation of the Offer Price and updated in the Prospectus. The amount utilised for general corporate purposes shall not exceed 25% of the Net Proceeds.
</div>

Burger King India (BKI IN) has filed for an IPO with the Securities and Exchange Board of India (SEBI). The initial filing in November 2019 was expected to raise INR 4bn through a fresh issue of up to 60m equity shares, along with a private placement of up to INR1.5bn.
However, on 22nd October 2020, the company filed an addendum to DRHP under which the size of the fresh issue has been increased to INR 6bn. The company has already undertaken a pre-IPO placement through a rights issue of 13.2mn equity shares to the Promoter at INR 44.00 per share, which aggregates to INR 580.8m, reducing the fresh issue size to INR 5,419.2m. Burger King India has mentioned that it may consider undertaking another pre-IPO placement of the remaining amount of up to INR 919.2m.
QSR Asia is the promoter entity and has F&amp;B Singapore, BK AsiaPac, RV Services Pte Ltd and Ajay Kaul (Senior director at F&amp;B Asia Ventures) as its shareholders. Investment banks Kotak Mahindra Capital, CLSA India, Edelweiss Financial Services and JM Financial have been appointed to advise the company on the IPO.
The company plans to use the proceeds from the IPO as follows.




Particulars


Amount (INRm)




Funding roll out of new Company-owned Burger King Restaurants


4,322.42




Repayment or prepayment of outstanding borrowings of the Company obtained for setting up of new Company-owned Burger King Restaurants


1,622.42




Capital expenditure incurred for setting up new Company-owned Burger   King Restaurants


2,700.00




General corporate purposes


*





Source: Company disclosures, *to be determined on finalisation of the Offer Price and updated in the Prospectus. The amount utilised for general corporate purposes shall not exceed 25% of the Net Proceeds.


Burger King India IPO: Whopping Revenue Growth

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Barbeque Nation Hospitality / Equity Capital Markets

Barbeque nation (BN) aims to raise around US$150m in its India IPO. It owns and operates casual dining restaurants under the same name, Barbeque Nation Restaurants. As of Nov 2019, it had 138 restaurants  in 73 cities in India and seven international restaurants in three other countries.The company had tried to list earlier in FY17 but was held back due to regulatory reasons. Hence, one has a longer financial history available for the company. The number of restaurants operated by the company has increased by 4x over FY13-19. This has led to strong revenue growth. However, EBITDA and PATMI have lagged revenue growth even though the cost of foods and beverages as a percentage of revenue has been declining. The pressure of margins appears to stem from rising employee costs.Even on a per restaurant basis, revenue, EBITDA and operating cash flow has been declining. Furthermore, the company recently acquired a group of Italian restaurants in order to diversify its offering. The last time it tried to diversify, it didn’t end up doing too well.

Barbeque nation (BN) aims to raise around US$150m in its India IPO. It owns and operates casual dining restaurants under the same name, Barbeque Nation Restaurants. As of Nov 2019, it had 138 restaurants  in 73 cities in India and seven international restaurants in three other countries.The company had tried to list earlier in FY17 but was held back due to regulatory reasons. Hence, one has a longer financial history available for the company. The number of restaurants operated by the company has increased by 4x over FY13-19. This has led to strong revenue growth. However, EBITDA and PATMI have lagged revenue growth even though the cost of foods and beverages as a percentage of revenue has been declining. The pressure of margins appears to stem from rising employee costs.Even on a per restaurant basis, revenue, EBITDA and operating cash flow has been declining. Furthermore, the company recently acquired a group of Italian restaurants in order to diversify its offering. The last time it tried to diversify, it didn’t end up doing too well.

Barbeque Nation Pre-IPO - Not Really a Feast

Burger King India (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master franchisee of the Burger King brand in India. As of Oct 2019, it operated 224 restaurants, including 8 sub-franchised restaurants, across 47 cities in India. In my previous note,<a href="https://www.smartkarma.com/insights/burger-king-india-pre-ipo-has-been-growing-fast-and-plans-to-grow-even-faster" target="_blank" rel="noopener"> Burger King India Pre-IPO - Has been growing fast and plans to grow even faster</a>, I covered the company’s background and looked into some of the issues that the company might face.In this note, I’ll compare the company to its two main listed peers in India, <a href="https://www.smartkarma.com/entities/westlife-development-ltd" target="_blank" data-smartkarma-citation="entities:14207:1" rel="noopener">Westlife Development (WLDL IN)</a> and <a href="https://www.smartkarma.com/entities/jubilant-foodworks-ltd" target="_blank" data-smartkarma-citation="entities:986:1" rel="noopener">Jubilant Foodworks (JUBI IN)</a>.

Burger King India (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master franchisee of the Burger King brand in India. As of Oct 2019, it operated 224 restaurants, including 8 sub-franchised restaurants, across 47 cities in India. In my previous note, Burger King India Pre-IPO - Has been growing fast and plans to grow even faster, I covered the company’s background and looked into some of the issues that the company might face.In this note, I’ll compare the company to its two main listed peers in India, Westlife Development (WLDL IN) and Jubilant Foodworks (JUBI IN).

Burger King India Pre-IPO - Peer Comparison Yields Interesting Nuggets on Profitability and Capex

<a href="https://www.smartkarma.com/entities/burger-king-india" target="_blank" data-smartkarma-citation="entities:28445:1" rel="noopener">Burger King India (BKI IN)</a> (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master franchisee of the Burger King brand in India. As of Oct 2019, it operated 224 restaurants, including 8 sub-franchised restaurants, across 47 cities in India.BKI’s no. of restaurants have increased by 2.3x over FY17-3M20, while its revenue has grown even faster at 66% CAGR over FY17-19. Although BKI hasn’t managed to break-even, however, it has narrowed its losses to just 0.8% over 3M20.

Burger King India (BKI IN) (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master franchisee of the Burger King brand in India. As of Oct 2019, it operated 224 restaurants, including 8 sub-franchised restaurants, across 47 cities in India.BKI’s no. of restaurants have increased by 2.3x over FY17-3M20, while its revenue has grown even faster at 66% CAGR over FY17-19. Although BKI hasn’t managed to break-even, however, it has narrowed its losses to just 0.8% over 3M20.

Burger King India Pre-IPO - Has Been Growing Fast and Plans to Grow Even Faster

India

Restaurant Brands Asia Limited owns and operates a chain of restaurants. The Company prepares and distributes ready to eat food products such as burgers, fries, and beverages. Restaurant Brands Asia serves customers in India.

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Restaurant Brands Asia (RBA IN)

Burger King India IPO: Whopping Revenue Growth

Burger King India was the fastest-growing QSR chain in the country during its past five years of operation and had a total of 261 restaurants by...

Oshadhi Kumarasiri

Barbeque Nation Pre-IPO - Not Really a Feast

Barbeque nation (BN) aims to raise around US$150m in its India IPO. It owns and operates casual dining restaurants under the same name, Barbeque...

Sumeet Singh

Burger King India Pre-IPO - Peer Comparison Yields Interesting Nuggets on Profitability and Capex

Burger King India (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national master...

Sumeet Singh

Burger King India Pre-IPO - Has Been Growing Fast and Plans to Grow Even Faster

Burger King India (BKI IN) (BKI) plans to raise around US$150m via a mix of selling primary and secondary shares in India. BKI is the national...

Sumeet Singh

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