Everstone part-exits Burger King India, Indonesia

The private equity firm reduced its stake in the business from 40.8% to 15.4%, according to a filing. The transaction entailed the sale of about 125.4m shares at INR 119.1 apiece on September 15. The stock spiked as high as INR 136.7 during that session and closed on September 18 at INR 124.1, giving the company a market capitalisation of about INR 63.5bn (USD 764m).

Everstone entered into a joint venture with Burger King Worldwide in 2013 with the agreement including a development license and 25-year master franchise and sub-franchise rights for all of India. At the time, there were no Burger King locations in the mostly non-beef-eating country.

Everstone recruited a management team featuring CEO Rajeev Varman, an Indian-born executive who had spent the previous 13 years with Burger King in different markets. Half the burgers on the menu were made vegetarian.

Burger King India is notable as the brand’s only franchise globally to tamper with the recipe of its core product, the Whopper, which is served with a chicken, lamb, or vegetarian patty. Pricing was also modified to cater to a value-focused market.

By the end of 2019, there were more than 220 stores in India and plans to reach 700 by 2025. The Indonesia footprint was about 150 restaurants. At the time, Everstone claimed average revenue per outlet in India was almost on par with competition, compared to an index of 50-60% in the US.

As of RBA’s IPO in late 2020, Burger Kind India had 261 locations in 57 cities, of which all but eight are centrally controlled. The Indian and Indonesian portfolios were said to be as large as about 390 and 170 stores respectively as of May, when local media identified General Atlantic and Advent International as being in advanced talks to buy Everstone’s stake.

Revenue grew 91% during the 2022 financial year to INR 9.4bn, while the net loss widened from INR 1.7bn to INR 929m. The company said challenges to achieving profitability have included high real estate prices and mall space rental prices, as well as COVID-19 lockdowns.

The growth in revenue was attributed largely to the recovery of dine-in business post-pandemic. Sales during 2022 also represent an uptick compared to pre-pandemic business levels, with the 12 months to March 2020 bringing in revenue of INR 8.5bn. That year the company posted a loss of INR 766m.

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• Topics
• South Asia
• Open market
• Consumer
• India
• Everstone Capital