The US-based Burger King, which has recently filed for an Initial Public Offering (IPO) in the Indian market, will use the money raised to double the number of stores in the country by the end of next year, in a bid to take on rival McDonald’s India. “We are looking for aggressive expansion. The brand has received good response, and with the IPO, we are looking to double our stores by the end of next year,” said a marketing executive of the company.
The India arm of Burger King has filed for an IPO to raise at least `400 crore ($56.6 million). According to the company’s IPO papers, it plans to use `290 crore to open new restaurants. B u r g e r K i n g launched its first restaurant in India in 2014 and competes with market leaders such as McDonald’s and KFC. The latest count shows that it currently has 216 companyowned and eight sub-franchised restaurants across 47 cities including Delhi-NCR, Mumbai, Pune, Chennai, Hyderabad, Bengaluru, Chandigarh, Ludhiana, Amritsar and Kochi.
It has already outpaced rival Starbucks and is fast competing with McDonald’s, which has 472 outlets. The company is planning to open restaurants in new areas, but has ruled out the regional franchise model. “We also intend to open restaurants in new areas and markets where we believe there is a strong potential for growth, in addition to taking advantage of the growing online delivery marke t , i n c l u d i n g through engagement with delivery aggregators,” the company said in its draft prospectus. In financial year 2018-19, Burger King India’s revenue from operations had risen 67 per cent to `6.33 billion ($89.4 million).
Its loss narrowed to `382.8 million in the same period from `822.3 million a year ago. “Burger King is going with a national franchise instead of regional ones. That gives them more control and potentially better growth,” said Technopak chairman Arvind Singhal. Private equity firm Everstone Capital, which operates Burger King India, is considering a private placement of shares worth `150 crore ahead of the IPO, according to the draft red herring prospectus.
To outpace rivals
Burger King India has filed for an IPO to raise at least I400 crore, out of which I290 crore will
be used by the firm to open new restaurants