Stock from the initial public offering of the California-based fast food chain El Pollo Loco sizzled yesterday, selling 7.1 million shares by the end of its first day on the market. Shares grew 60 percent from the IPO of $15 to $24.03. Common stock of the Costa Mesa company raised $107 million.

Chief Executive Steve Sather said the restaurant chain is markedly different from competitors by offering real healthy food options at affordable prices.

"Our chicken is healthy. It's not deep-fried like some of our competitors'," he told the Los Angeles Times. "I think consumers are demanding not only products that taste great and are great quality, but also ones that are healthy for them. We are starting to hit that sweet spot."

After opening its first location in Los Angeles in 1980, El Pollo Loco has expanded to offer its grilled citrus chicken over 400 locations among five states.

However, with this initial financial success with its IPO, some are skeptical if El Pollo Loco has the potential to turn a major profit. The fast food restaurant was hit hard by the recession and has not been profitable for the last seven years, even though the most recent quarter's financials did show the company was in the black.

Due to past financial struggles, El Pollo Loco has accumulated a significant amount of debt. The millions made during the IPO will have to go back toward outstanding loans, chipping away at the restaurant's $288.8 million total debt.

An industry analyst at IBISWorld, Antal Neville, said El Pollo Loco is among a group of IPOs that are taking advantage of the market's strength right now.

"It's been a good year for IPOs, and I think the restaurant industry like other industries has been able to capitalize on that," Neville said. "[El Pollo Loco seems] to feel it's a good strategy for them."

Related