Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Burger King India IPO Valuation: Offered at a Discount to Peers, But Not Cheap on Absolute Value

Burger King India IPO: Revenue Growth Offsets The Lack of Profitability

Burger King India IPO: Whopping Revenue Growth

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

<ul>
<li>India’s fastest growing quick-service restaurant chain <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> started trading on 14<sup>th</sup> December 2020. The shares opened trading at INR 112.5 per share, up 88% from the offer price and closed the opening day at INR 138.4 per share, up 131% from the IPO price. The momentum is till strong and Burger King India shares are currently trading near INR 200.0 per share.</li>
<li>Burger King entered the Indian market in 2015, almost two decades after Domino’s, which currently leads the Indian QSR market with about 1,250 restaurants compared to the 261 Burger King restaurants. Subway, McDonald’s and KFC, entered the Indian QSR market in 2001,1996 and 2004 respectively and has 2.5x, 1.8x and 1.5x the number of Burger King restaurants in India currently.</li>
<li>We liked the company’s growth potential, but we were worried about its lower profitability compared to peers. Therefore, we were skeptical about Burger King India as a long-term investment, even though the IPO was priced at a significant discount to peer multiples.</li>
<li>In this insight, we explore what could be a good exit point for IPO investors and also suggests an entry point for short sellers.</li>
</ul>


India’s fastest growing quick-service restaurant chain Burger King India (BKI IN) started trading on 14th December 2020. The shares opened trading at INR 112.5 per share, up 88% from the offer price and closed the opening day at INR 138.4 per share, up 131% from the IPO price. The momentum is till strong and Burger King India shares are currently trading near INR 200.0 per share.
Burger King entered the Indian market in 2015, almost two decades after Domino’s, which currently leads the Indian QSR market with about 1,250 restaurants compared to the 261 Burger King restaurants. Subway, McDonald’s and KFC, entered the Indian QSR market in 2001,1996 and 2004 respectively and has 2.5x, 1.8x and 1.5x the number of Burger King restaurants in India currently.
We liked the company’s growth potential, but we were worried about its lower profitability compared to peers. Therefore, we were skeptical about Burger King India as a long-term investment, even though the IPO was priced at a significant discount to peer multiples.
In this insight, we explore what could be a good exit point for IPO investors and also suggests an entry point for short sellers.


Burger King India IPO Trading Update: More Speculation Than Investment