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Sapphire Foods India Ltd

Price Range (₹)

Rs. 1120 – Rs. 1180

Issue Size (₹ in Cr.)

Upto Rs. 2,073.30 cr

Minimum Quantity

12 shares

Bidding Period

Nov 9 - Nov 11, 2021
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About the Sapphire Foods India Ltd

'Sapphire Foods India Limited' is YUM's largest franchisee operator in the Indian subcontinent in terms of revenue in FY 2020.

As of March 31, 2021, they owned and operated 204 KFC restaurants in India and the Maldives, 231 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.

The company operates its restaurants in high traffic and high visibility locations in key metropolitan areas and cities across India and develop new restaurants in new cities as part of their brand and food category expansion.

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Strengths

Leading QSR brands with a substantial market presence and scale

Sapphire Foods is one of India’s largest restaurant franchisee operators, in terms of revenue for the financial year 2020 and number of restaurants operated as of December 31, 2020.

 

Strong relationship with YUM

They are YUM’s largest franchisee operator in the Indian subcontinent in terms of revenue in the financial year 2020. Their association with YUM started in 2015 and they presently have the non-exclusive rights to operate restaurants under three of YUM’s leading brands, namely, the KFC, Pizza Hut and Taco Bell brands.

Continuous focus on delivering great customer experience

They monitor the quality of their customer experience through a sophisticated Guest Experience Survey (“GES”) system, a third party tool used around the world to measure customer satisfaction, to give them customer feedback etc.

Risks

Operate their restaurants pursuant to the Franchisee Arrangement that imposes certain restrictions and obligations on company

The Franchisee Arrangement allows them to operate, on a non-exclusive basis, under the KFC brand in several states in India and across the Maldives, the Pizza Hut brand in several states in India and across Sri Lanka and Maldives, and the Taco Bell brand across Sri Lanka (collectively, the “Territories”).

Inability to recognize and respond to changes in consumer preferences and food habits could have an adverse effect on Sapphire Foods business results of operations, and financial condition.

The competitive position depends on their continued ability to offer a menu that has a strong appeal to consumers. Upon prior agreement with YUM, Sapphire Foods tailor their menu, promotions and pricing to local tastes, restrictions and preferences through their customer proposition, in particular with respect to a wide variety of value offerings at entry and premium price points.

Financials

  • Net Worth
  • Total Income
  • Total assets
  • Revenue from Operation
  • Net cash inflows/(outflows)
  • Total borrowings
  • Restated Loss after Tax

Industry Trends

Various factors increasing contribution of food services sector to GDP

1. Increasing food expenditure at restaurants

A household spends approximately 38% of its out-of-home dining spend at quick service restaurants (“QSRs”),

followed by casual dining restaurants (“CDRs”) (31%) and cafes (14%). The high share of QSRs in the overall spend is driven by easy access, competitive price points, combos and deals, making it as one of the most favored among young people and young office goers.

2. Increasing non-vegetarian population of India

According to data released by Government of India in 2014, it was estimated that 72% of males and 71% of females aged 15 years old and above were non-vegetarian. 

3. Increasing eating-out and ordering-in behavior

Urban consumers nowadays do not need any special occasion to eat out. Occasions for eating out can vary from going shopping and on casual outings to spending free time. 

QSRs are the most preferred destination for eating out. In financial year 2020, 38% of consumers preferred eating at QSRs while only 31% preferred eating at CDRs. Indians are eating out not only to consume food but also to socialize and to experiment with various cuisines. The trend of eating out is increasing across all sections of society, irrespective of economic class.

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  • lock-in of 3 years
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    Choose the IPO you want to apply from the list. Click on Apply.

  • lock-in of 3 years
    Fill in the required details

    Fill in the quantity of shares. To apply at maximum price, check the cut-off price box and amount is auto calculated. If you want to apply at some other price within the price band, then you can enter the price manually by clicking on “Add bid” option.

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