This Burger Chain's Share Price Doubled in Its First Day After IPOIt's the most successful debut by a fast casual restaurant chain in the United States this year.

ByReuters

This story originally appeared onReuters

Reuters | The Habit Burger Grill
The Habit Burger Grill Restaurant

Shares of Habit Restaurants Inc, known for its charburgers, doubled in their first day of trading, making it the most successful debut by a fast casual restaurant chain in the United States this year.

The stock opened at $30 and shot up to $36, double its IPO price of $18, within five minutes of trading on the Nasdaq.

Habit provides calorie count and nutritional information of its products, much like Zoe's Kitchen Inc, whose stock shot up 74 percent in their debut in April.

The popularity of such fast casual chains underscores consumer's preference for healthier food and investors have shown a healthy appetite for such stocks.

Zoe's shares have more than doubled since their debut, while El Pollo Loco Holdings Inc's are near that mark. J. Alexander's Holdings Inc has filed for an IPO, while Shake Shack is reported to have picked banks for a proposed offering.

"People are moving from fast food to specialty restaurants," said Joseph Schuster, founder of IPO research firm IPOX Schuster LLC.

"It's a long-term structural trend and some of these specialty IPOs fit that niche very well and there is strong underpinning demand for these deals."

Sales in the U.S. fast casual industry rose 11.3 percent to $34.5 billion in 2013 and are expected to exceed $50 billion by 2018, according to research firm Technomic.

Habit Restaurants' revenue rose 43 percent to $120.4 million in 2013, while net income nearly doubled to $5.8 million.

Habit Restaurants has expanded rapidly in the past five years, going from 26 restaurants at the end of 2009 to 99 as of October. But its presence is limited to four U.S. states including California.

Habit plans to double the number of restaurants in next four years, itsaid in its IPO filing.

Founded in Southern California by two brothers in 1969, the same year that burger chain Wendy's was founded, Habit was acquired by investment firm KarpReilly LLC in 2007.

Shares of the company were up 93 percent at $34.71, making it the top percentage gainer on the Nasdaq. At their session high, the company was valued at about $909 million.

Piper Jaffray, Baird and Wells Fargo were among the underwriters to the IPO.

(Reporting by Neha Dimri in Bangalore; Editing by Savio D'Souza)

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