Burger King IPO listing day strategy: Sell after listing gains, or hold for more returns?

Burger King India’s Rs 810-crore initial public offer (IPO) became the second most subscribed issue this fiscal so far. The quick service chain company was subscribed 156.65 times at the close of the public offer, receiving bids for 1,167 crore equity shares as against 7.44 crore shares on offer. Seeing such a robust response from all categories, analysts expect Burger King India shares to give listing gains; analysts also suggest adding it to the portfolio to earn good returns in mid to long-term. “It is definitely a good IPO for listing gains and from the mid to longer-term too it seems good stocks in the portfolio. We may see a premium listing of 30% or even more,” Vishal Wagh, Head of Research, Bonanza Portfolio Ltd, told Financial Express Online.

Burger King India 14th IPO this year

Wagh also added that Burger King India’s nature of the business, the scope of expansion, positive sentiment in market and availability of liquid flow in the market helped it to receive the second-highest subscription in the current year after Mazagon Dock Shipbuilders. The Rs 444-crore Mazagon Dock Shipbuilders IPO was subscribed 157.41 times and became the most subscribed public issue this calendar year. While Happiest Minds Technologies was the third most subscribed IPO so far this fiscal with 150.98 times application. Burger King India was the fourteenth IPO this year. 

Use listing day gains to book profit in Burger King India

According to Abhijeet Ramachandran, Independent Analyst/ Co-Founder and Trainer at Tips2Trade, consumer and especially food business in India have been growing at a rapid pace over the last few years. “Any gains upwards of 20% on listing day should be used to book some profits. New investors should wait for a dip and enter into the stock as the overall market as well looks overbought,” Ramachandran said.

Grey market premium surges 66.6%

In the grey market also, Burger King India shares were seen trading with a Rs 40 premium over the issue price of Rs 60 apiece. The stocks were trading at Rs 100 apiece, implying a premium of 66.6 per cent. The share allotment in Burger King India IPO is likely to happen on December 9, 2020 and listing is expected December 15, 2020. Link Intime India Pvt Ltd is the registrar of Burger King India IPO and will manage allocation and refund. 

Ramachandran further added that changes in lifestyle, urbanisation and better spending capabilities have led to tremendous growth opportunities in the QSR segment. This, along with a reasonably strong brand name has led robust demand for the Burger King IPO.