Devyani International IPO ends with stellar subscription

Published on Aug 09, 2021 13:56

The initial public offer of quick-service restaurant chain (QSR) operator Devyani International received bids for 1,313.79 crore shares as against 11.25 crore shares on offer, according to stock exchange data. The issue was subscribed 116.71 times.

The qualified institutional buyers (QIBs) category was subscribed 95.27 times. The retail individual investors (RIIs) category was subscribed 39.52 times. The non-institutional investors (NIIs) category was subscribed 213.06 times.

The issue opened for bidding on Wednesday (4 August 2021) and it will close Friday (6 August 2021). The price band of the IPO is fixed at Rs 86-90 per share.

The IPO comprised of fresh issue of equity shares aggregating upto Rs 440 crore and an offer for sale (OFS) of 15,53,33,330 crore equity shares by Dunearn and RJ Corp, the investor shareholders.

The promoters of the company are Ravi Kant Jaipuria, Varun Jaipuria and RJ Corp. The promoters holds an aggregate of 87,43,39,464 equity shares, aggregating to 75.79% of the pre-offer issued and paid-up equity share capital. Post issue, the selling shareholders will have about 67.99% of the share capital.

The objectives for the fresh issue are repayment/ prepayment of Rs 324 crore of borrowings and remaining amount to be used for general corporate purposes.

Ahead of the IPO, Devyani International on 3 August 2021 finalized allocation of 9,16,52,499 equity shares to anchor investors, at Rs 90 per equity share, aggregating to Rs 824.87 crore.

Devyani International is the largest franchisee of Yum Brands in India and is among the largest operators of chain quick service restaurants (QSR) in India on a non-exclusive basis. Yum Brands Inc. operates brands such as KFC, Pizza Hut and Taco Bell and has presence globally with more than 50,000 restaurants in over 150 countries, as of 31 December 2020.

As of 31 June 2021, Devyani International operate 696 stores across 166 cities in India. The company is a franchisee for the Costa Coffee, Pizza Hut and KFC brands and stores in India. Other than Pizza Hut, KFC, and Costa Coffee company operates brands such as Vaango, Taco Bell, coffee chain Costa Coffee, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar.

The business is broadly classified into three verticals: core brands (includes stores of KFC, Pizza Hut and Costa Coffee operated in India) which contributed 81.95% of total revenue in FY 2021, International business (stores operated outside India primarily comprising KFC and Pizza Hut stores operated in Nepal and Nigeria) contributing 12.23% of total revenue and other business contributing 5.81% of total revenue (includes certain other operations in the F&B industry, including stores of its own brands such as Vaango and Food Street).

The core brands and international segment together accounted for 94.19% of total revenue in FY 2021. Out of this, 70.20% is said to be earned due to delivery sales, a jump of 19% in delivery sales compared to 51.15% in FY 2020.

The company reported a net loss of Rs 55.21 crore and sales of Rs 1,134.84 crore in the twelve months ended 31 March 2021.