Restaurant Brands hits new low post listing of shares issued to QIBs

A total of 108.40 million shares allotted to qualified institutional buyers started trading on the exchanges on Friday, February 18, 2022.

Shares of Restaurant Brands Asia Limited (formerly known as Burger King India) hit a record low of Rs 108.25, down 15 per cent in Monday’s intra-day trade, falling as much as 19 per cent in the past two trading days as fresh shares allotted by the company to qualified institutional buyers (QIBs) started trading on the exchanges on Friday, February 18, 2022. In the past three trading days the stock has dropped 23 per cent from a level of Rs 139.90.

The stock of the quick service restaurant chain company has fallen below its qualified institutional placement (QIP) issue price of Rs 129.25 per share. The stock now trades at its lowest level post its market debut on December 14, 2020. However, the stock is still trading above its initial public offer (IPO) price of Rs 60 per share.

Restaurant Brands Asia had raised Rs 1,402 crore through qualified institutional placement by issuing 108.48 million equity shares to eligible QIBs at an issue price of Rs 129.25 per share. The company allotted 13.48 million shares to BNP Paribas Arbitrage – ODI and 11.31 million shares to Fidelity Investment Trust: Fidelity Emerging Markets Fund. The company allotted over 5 million shares to Aditya Birla Sun Life Trustee Private Limited, Newport Asia Institutional Fund LP, Bofa Securities Europe SA – ODI, Amansa Holdings Private Limited and Bajaj Allianz Life Insurance Company Limited, the company said in an exchange filing.

Restaurant Brands Asia intends to use the net proceeds for funding the acquisition and fresh capital infusion for amounts to be determined on closing towards settlement of any debt and debt like adjustments. The company will use the fund for further investment/capital infusion of US$40 million in BK Indonesia towards supporting any of its business requirements, business expansion plans and acquisition of any other business/asset/brand, meeting the transaction expenses relating to the acquisition, incurring any capital expenditure in respect of the business operations of our company and general corporate purpose.

Meanwhile, Restaurant Brands Asia’s December quarter (Q3FY22) operating performance was weaker than expected in a few areas - dine-in ADS recovery at 78 per cent (versus FY2020 avg.) was weak, pre-Ind AS EBITDA margin at about 4 per cent was a bit subdued. The company executed well on a few fronts— 20 new BK stores and 18 BK Cafes rolled out in Q3, 65 bps QoQ improvements in gross margin, and steady traction in the BK app, analysts at Kotak Securities said in its result update.