Skip to main content

Who decides the price band of an IPO?

For the announcement of the price band and the bid offer period, working day means all days, excluding all Saturdays, Sundays and public holidays on which commercial banks in Mumbai are open for business. The price band may move up or down to the extent of 20 per cent of the floor price and the cap price is revised accordingly. The  price  band and the minimum bid lot of an initial public  offer  ( IPO ) is decided by the promoters or selling shareholders of a company in consultation with the book running lead managers (BRLMs). It is advertised in widely circulated English and Hindi national newspapers, at least two working days prior to the offer opening date, with the relevant financial ratios calculated at the floor price and cap price and are made available to the stock exchanges for uploading on their websites. For the announcement of the price band and the bid offer period, working day means all days, excluding all Saturdays, Sundays and public holidays on whic...
Post a Comment

With IPO deferred, Burger King India looks to raise ₹100-150 crore from PE funds

  • Burger King was planning to raise around ₹480 crore in primary capital, for loan repayments, expansion
  • Market crash following the rapid spread of COVID-19 forced the company to defer the IPO temporarily

With its initial public offering (IPO) plans impacted by the coronavirus (COVID-19) pandemic induced market crash, Everstone Capital backed-fast food chain Burger King India Ltd has been engaged in talks to raise around Rs100-150 crore from private equity funds, said two people aware of the development.

Burger King India was planning to launch its IPO later this month and had filed the red herring prospectus with the registrar of companies on 11 March. The market crash following the rapid global spread of COVID-19 forced the company to defer the public offer temporarily.

Burger King India was planning to raise around ₹480 crore in primary capital, for loan repayments, expanding its store network, the RHP filed by the company shows. Its promoter —QSR Asia Pte Ltd, planned to sell a part of its stake in the company through the IPO. Collectively, the share was supposed to be worth over ₹1,000 crore. QSR Asia is owned by private equity firm Everstone.

With the IPO now temporarily pushed back, the company has been engaged in talks with private equity firms to raise capital till the time markets stabilize and consumer demand returns to normal, said one of the people cited above, requesting anonymity.

"They are in talks with PE funds including Oman India Joint Investment Fund (OIJIF) for raising ₹10 crore or more, which will be used for store expansion and loan repayments. They have an annual mandate to expand their store network to a certain number and they need quite a bit of capital to set up these company owned stores," said the other person cited above, also requesting anonymity.

According to the draft prospectus filed by the company in November, Burger King India had 216 company-owned restaurants and eight sub-franchised restaurants across 47 cities in India, including Delhi-NCR, Mumbai, Pune, Chennai, Hyderabad, Bengaluru, Chandigarh, Ludhiana, Amritsar and Kochi.

"Burger King India evinced strong response to its growth story and positioning during the recent IPO roadshows including requests for Pre IPO and anchor. Despite the current situation, there continues to be strong interest. Any sale prior to IPO would be a Pre IPO sale and not a PE stake sale. Burger King India is committed to IPO once the markets stabilize. There is no change in our plan for the IPO," said a spokesperson for Eversrtone.

Emails sent to OIJIF did not elicit a response.

Burger King India's revenue from sale of food and beverages nearly doubled to ₹633 crore, on yearly basis, in FY19. Its same store sales grew 29% in the given period and losses reduced to ₹38 crore from ₹82 crore in FY18.

Burger King India is not the only company whose IPO plans have been impacted by COVID-19.

Specialty chemicals maker Rossari Biotech Ltd which was planning to launch its IPO in the same week as Burger King India has also deferred its plans, according to a Mint report. Antony Waste Handling Cell Ltd, which had opened its initial share sale on 4 March, had to withdraw the public offering after it failed to attract enough investor interest in volatile markets, despite having extended the IPO beyond its original three-day period.

Comments

Post a Comment

Popular posts from this blog

SBI Card IPO oversubscribed 15.5 times on Day 3, QIB subscription at 57x

SBI Cards and Payment Services, the first initial public offering of 2020 has seen a 15.48 times subscription on March 4, the third day of bidding. SBI Card is the biggest public issue after GIC Re which was launched in October 2017. The issue has so far received bids for over 155.35 crore equity shares against IPO size of more than 10 crore equity shares (excluding anchor book), the exchanges data showed. March 4 is the last day for qualified institutional bidders whose reserved portion was subscribed 57.18 times. The issue will remain open till March 5 for all other investors. The portion set aside for non-institutional investors (or high networth individuals) saw 2.18 times subscription, while that of retail bidders 1.76 times. The reserved portion of employees, for whom the country's second largest card issuer will offer shares at a discount of Rs 75 on final IPO price, has subscribed 3.29 times, while that of  SBI...
2 comments
Read more

Who decides the price band of an IPO?

For the announcement of the price band and the bid offer period, working day means all days, excluding all Saturdays, Sundays and public holidays on which commercial banks in Mumbai are open for business. The price band may move up or down to the extent of 20 per cent of the floor price and the cap price is revised accordingly. The  price  band and the minimum bid lot of an initial public  offer  ( IPO ) is decided by the promoters or selling shareholders of a company in consultation with the book running lead managers (BRLMs). It is advertised in widely circulated English and Hindi national newspapers, at least two working days prior to the offer opening date, with the relevant financial ratios calculated at the floor price and cap price and are made available to the stock exchanges for uploading on their websites. For the announcement of the price band and the bid offer period, working day means all days, excluding all Saturdays, Sundays and public holidays on whic...
Post a Comment
Read more

Rupee rises against US dollar, a day after hitting record low

The rupee today gained against the US dollar today amid a broad weakening of the greenback after US Federal Reserve announced another round of stimulus measures to cushion the impact of  coronavirus  on American economy. Other Asian currencies were also higher against the US dollar today. The rupee today rose to 75.93 per US dollar at day's high, as compared to previous close of 76.29. The rupee had hit a record low of 76.32 against the US dollar in the previous session. Paring some early gains, the rupee recently traded at 76.09 per dollar. Indian stocks markets also failed to sustain early gains and the Sensex was up 1% after surging 5% earlier. In global markets, the US dollar slipped after the Fed announced unlimited quantitative easing and programmes to support credit markets, pulling out all stops to supply much needed greenback liquidity. The dollar index lost about 0.8% to 101.67, slipping further from Friday's peak of 102.99, its highest level since January 2017. Year...
Post a Comment
Read more