Burger King India falls for first time in 4 days as investors book profit

The QSR's stock tumbled 18 per cent from its fresh record high of Rs 219.15, hit on the BSE in Thursday's early morning trade

Shares of Burger King India were locked in 10 per cent lower circuit limit at Rs 179.35 on the BSE on Thursday as investors booked profit. The stock fell 18 per cent from its intra-day high of Rs 219.15. 

Till 02:28 pm, a combined 34 million equity shares, representing nearly 9 per cent of the total equity capital of Burger King India, changed hands on the NSE and BSE. There were pending sell orders for a combined 4 million shares on the exchanges, the data show.

The stock of the quick-service restaurant (QSR) hit a fresh high of Rs 219.15 on the BSE in early morning trade, zooming 59 per cent since its listing on Monday. On December 14, the stock had closed at Rs 138, clocking a 130 per cent premium over its issue price of Rs 60 on the BSE. With today's intra-day gain, the stock has risen as much as 265 per cent from its issue price.

Post-listing shareholding pattern filed by Burger King India reveals that foreign portfolio investors held 11.36 per cent stake in the company, followed by mutual funds (10.10 per cent), individual shareholders (8.22 per cent) and financial institutions and banks (3.21 per cent).

Among others, overseas bodies corporate held 9.58 per cent holding and Amansa Investments held 7.39 per cent stake in the company, the data show.

The subsidiary of the US-based fast-food chain Burger King is one of the fastest-growing international QSR chains in India. It received a massive response to its IPO which was oversubscribed by 157 times.

Burger King India reported losses in FY18, FY19, FY20 and H1FY21, leading to negative retained earnings of Rs 462 in H1FY21. This has resulted in erosion of a substantial portion of its other equity.

"An over 90 per cent premium is an impressive listing gain. However, the company holds only 5 per cent market share and has been incurring losses for a while. And even though they have huge expansion plans to open 700 restaurants by December 2026, one would need profits to execute it. Moreover, if they do expand, they are likely to widen their losses. Therefore, we believe, the company is unlikely to make profits over the next two years. And one should book their listing gains and exit," AK Prabhakar, head of research at IDBI Capital said after stellar debut made by Burger King India on Monday. CLICK HERE TO READ FULL REPORT