About Devyani International Ltd:
Devyani International Ltd is the largest Yum Brands franchisee in India and one of the country’s leading operators of chain quick-service restaurants (QSR).
As of March 31, 2021, the company had 655 outlets in 155 cities across India. Yum! Brands Inc. owns and runs KFC, Pizza Hut, and Taco Bell restaurants around the world, with over 50,000 locations in more than 150 countries.
About the IPO:
Devyani International IPO subscriptions will begin on August 4th and end on August 6th, 2021. The additional offering of up to Rs. 1,838 crores in the Initial Public Offering of Equity Shares.
The new issuance was reported as raising up to Rs 440 crore and offering up to 155,333,330 equity shares for sale.
The offer’s price range has been set at Rs 86–90 per share.
The IPO constitutes an offer for sale of up to 155.33 million shares by the existing shareholders and promoters as well as an Rs440 crore fresh issue.
Objectives of the IPO:
The objectives of the Devyani International Ipo are:
(i) Repayment of all borrowings
(ii) General corporate purposes
RJ Corp Ltd owns the company are up to 90 million. While Dunearn Investments Mauritius Pte is owned the company up to 65.34 million shares, The proceeds of the offering will then be used to repay some or all of the firm’s debts.
The total outstanding borrowings of its Company (on a consolidated level) were 541.59 Crores as of June 2021. Devyani is India’s largest quick-service restaurant (QSR) company to be listed on Swiggy and Zomato in 2019-2020
Investment bankers that are been appointed for the Issue are as follows :
- Kotak Mahindra Capital Company Ltd,
- Motilal Oswal Investment Advisors Ltd,
- CLSA India Pvt Ltd,
- Edelweiss Financial Services Ltd.
|Devyani International IPO details|
|Subscription Dates||4 – 6 August 2021|
|Price Band||INR86 – 90 per share|
|Fresh issue||INR440 crore|
|Offer For Sale||155,333,330 shares (INR1,335.87 – 1,398 crore)|
|Total IPO size||INR1,775.87 – 1,838 crore|
|Minimum bid (lot size)||165 shares|
|Face Value||INR1 per share|
|Listing On||NSE, BSE|
- The product portfolio of reputed QSR brands financial discipline, a competitive advantage.
- Yum Brands’ is the largest franchisee in India.
- Cross-brand synergies provide you with more operating leverage.
- Significant emphasis on cash flow management.
- Revenues falling from Rs 542 crore in FY20 to Rs 284 crore in FY21.
- The company’s auditors had expressed concern about audited financial statements.
- The majority of the stores are located on leased sites because of which renting costs are incurred
- The company had 297 Pizza Hut locations, 264 KFC locations, and 44 Costa Coffee Locations as of March 31, 2021, in India.
- The core brand stores grew from 469 to 605 outlets between March 2019 and March 2021 which is about 13.58 percent.
- Core Brands Business’s shop network should be strategically expanded
- Invest in technology and place a strong emphasis on digital capabilities
- Continue to increase performance
- Focus on Core Brands’ delivery channel
IPO Issue Allocation:
- For QIB the issue allocation is not More than 50% of the offer
- For NII the issue allocation is not less than 15% of the offer
- For Retail, the issue allocation is not less than 35% of the offer
The company is a major QSR player with well-known international brands. However, the company has experienced a net loss in recent years as a result of high advertising costs, license fees, and commissions.
With the current euphoria in the stock market and IPO listings, one can subscribe to the IPO. Despite the epidemic, it has continued to develop its shop network, opening 109 outlets in the last six months across its core brand business.
KFC and Pizza Hut were among the first to provide contactless delivery in May 2020 and June 2020, respectively.
It is expected that considerable interest will be seen through this IPO. It also provides listing gains. With an increasing number of individuals ordering food or visiting restaurants, future growth appears to be optimistic.