The price of the Burger King share zooms by 20% today and rises by over 176% compared to the IPO price. should you sell, hold or buy?

Burger King’s Rs 810 billion IPO received a strong response from investors across various categories and was subscribed 156.65 times.

Burger King India’s shares rose 20 percent to finish at BSE at Rs 166.05 apiece today after making a strong debut on the stock markets on Monday. The stock rose nearly 131 percent from the issue price of 60 rupees each in the previous session. With today’s price rally, Burger King India’s stock is up 176.75 percent from its IPO price, while its market capitalization stands at 6,337.37 rupees. “At the current prices, the ratings seem to be very stretched. Technically, 160 remains a strong resistance. Investors are advised to book at least a portion of the profit as a sharp correction to 130-115 cannot be ruled out, ”Abhijeet Ramachandran, independent analyst / co-founder and trainer at Tips2Trade, told Financial Express Online.

Listing is in line with expectations

Burger King India shares were quoted at a premium of 92 percent over the issue price. Most analysts and brokerage firms had recommended subscribing to Burger King India’s IPO in order to record profits. According to analysts at Angel Broking, Burger King India’s listing was in line with expectations as the issue was markedly discounted compared to publicly traded companies such as Jubilant FoodWorks (Domino’s Pizza) and Westlife Development (McDonald’s).

Short term profit versus long term investment

Keshav Lahoti, associate equity analyst at Angel Broking Ltd, said short-term investors can see profits. “We advise long-term investors to remain invested in the company as the company has room to grow its business in India,” said Lahoti. Lahoti said the company will continue to gain market share by opening more stores compared to its competitors. “As the number of trades increases, operational leverage will increase and the company will be able to report profits and it will result in a multiple re-valuation for the stock,” he added.

Burger King India’s listing is fourth best in 2020. Its initial public offering (IPO) of Rs 810 billion was positively received by investors in various categories and subscribed 156.65 times. So far, Chemcon Specialty Chemicals has risen the most on the trading day and has increased 114 percent of the issue price, followed by Happiest Minds Technologies with 111 percent listing gains and Route Mobile with 104 percent premium on the trading day.

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