Burger King’s m-cap grows over 3 times in three days

Mumbai: Dalal Street newcomer Burger King India has outpaced its more established rival Westlife Development, which runs McDonald’s outlets in south and west of India, in market value within three days of its listing. Burger King India's shares have tripled in value since listing on Monday with its market capitalisation touching Rs 7,600 crore on Wednesday. Westlife Development, which took Hardcastle Restaurants -- the operator of McDonalds outlets in the two regions-- under its fold in 2013, has a market cap of Rs 7,300 crore. Analysts, however, warn of 'irrational exuberance' in shares of several smaller companies, such as Burger King.

Burger King India's shares hit an upper circuit for the third straight day, ending up 20 per cent at Rs 199.25, over 3.5 times the value of its IPO price of Rs 60 per share. Its IPO was subscribed 156.65 times, and the stock's listing day performance was the best debut by a company since 2017. The success of Burger King's IPO has rubbed off on stocks of other companies listed in the QSR space, with Westlife Development's shares surging 12.2 per cent to close at Rs 469.50 on Wednesday while Jubilant FoodWorks gained 3.6 per cent to close at Rs 2,675.20.

"There is a frenzy and a left-out-feeling in the market. The momentum in midcaps is so strong that even stretched valuations are not being seen," said Sanjiv Bhasin, director, IIFL Securities.