Burger King share price zooms 16% today, rallies 167% from IPO price; should you sell, hold or buy?

Burger King India shares rallied 16 per cent to Rs 160.55 apiece on BSE today, following a strong debut on the bourses on Monday. The stock skyrocketed nearly 131 per cent from the issue price of Rs 60 apiece in the previous session. With today’s rally in the stock price, Burger King India’s share price has now zoomed 167.58 per cent from the IPO price, while its market capitalisation stands at Rs 5,959.54 crore. “At current prices, valuations seem to be very stretched fundamentally. Technically, 160 remains a strong resistance. Investors are advised to book at least part profits as a sharp correction till 130-115 cannot be ruled out,” Abhijeet Ramachandran, Independent Analyst/ Co-Founder and Trainer at Tips2Trade, told Financial Express Online.

Listing meets expectations

Burger King India shares were listed at 92 per cent premium over the issue price. Most of the analysts and brokerage firms had recommended to ‘subscribe’ to the Burger King India IPO for listing gains. According to analysts at Angel Broking, Burger King India’s listing was in line with expectation as the issue was priced at a significant discount as compared to listed peers such as Jubilant FoodWorks (Domino’s Pizza) and Westlife Development (McDonald’s).

Short term profit vs long term investment

Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd, said that short term investors can book profit. “We advise long term investors to stay invested in the company as there is ample scope available for the company to increase its business in India,” Lahoti said. Lahoti further said that in future too, the company is expected to gain market share by opening more stores as compared to the competitors. “As the store count will increase, operating leverage will kick in and the company will be able to report profit and it will lead re-rating of the multiple for the stock,” he added.

Burger King India shares listing is the fourth-best listing in 2020. It’s Rs 810-crore initial public offer (IPO) received a robust response from investors across categories and was subscribed 156.65 times. So far, Chemcon Speciality Chemicals has risen the most on the stock market debut day, gaining 114 per cent from the issue price, followed by Happiest Minds Technologies with 111 per cent listing gains and Route Mobile with a 104 per cent premium on listing day.