IPO investors had a taste of excessive speculation on Thursday. The share price of Burger King India declined 18 per cent from the intra-day high level and was locked in a 10 per cent lower circuit from yesterday’s close.
This is after a spectacular listing earlier this week and two-day gains subsequently. Thursday’s fall in share price shaved-off more than ₹1,500 crore in the company’s market capitalisation.
Burger King, which had an IPO price of ₹60 opened with a gain of 93 per cent on December 14, the listing day, and closed 131 per cent higher. The stock hit another 20 per cent upper circuit for two consecutive days to touch a high of ₹219.
Burger King India’s IPO was subscribed 157 times over. The company operates 268 restaurants in 57 cities in India.
On the listing day, IPO and investment advisor Arun Kejriwal, founder of Mumbai-based Kejriwal Research, had cautioned that the company was yet to report profits and the faster opening of stores was more than discounted. On Thursday, Burger King’s market-cap stood at over ₹6,800 crore.
Meanwhile, the IPO of Mrs Bectors Food Specialities, a retail and institutional bakery company, was oversubscribed by 198 times on the last day of subscription on Thursday. It is a leading premium biscuit and bakery firm in north India with a 4.5 per cent market share.
The offer received bids for 262 crore equity shares against 1.32 crore on offer. The portion set aside for non-institutional investors was subscribed 620.85 times and qualified institutional buyers 76.85 times. Retail investors and employees’ reserved portion were subscribed 29.3 and 45.45 times respectively.
The IPO is a fresh issue of ₹40.54 crore and an offer-for-sale of ₹500 crore. It had a price band of ₹286-288/share.