Monday. At 10 a.m. on August 16, the largest Indian franchisee of Pizza Hut and KFC will be listed at Bombay Stock Exchange and National Stock Exchange (NSE). When it opened for subscription earlier in the month, Devyani International's initial public offering (IPO) received an overwhelming response from investors. The public issue of Rs 1,838 crore was purchased a staggering 116.71 times. According to data from the stock exchange, investors offered more than 1,313.79 million shares for a total issue of more than 11.25 crore.
"Devyani International IPO will list on an exchange on 16 August 2021. Devyani International received strong responses from investors and was oversubscribed approximately 116.7x. Due to the lower EV/Sales (FY21), we expect strong listing gains. This is 9.9x less than peers (Jubilant Foodworks-15.4x; Burger King India-14.8x; Westlife Development -10x). Devyani International also has a higher operating margin than Westlife Development & Burger King," stated Amarjeet Marya, Angel Broking Ltd. AVP - mid-caps, Angel Broking Ltd.
Devyani International stock traded at Rs 55-57 on the unofficial market prior to the listing. Devyani International's grey market premium was around 60% higher than the issue price, and it was trading at Rs 145-147. Devyani International's high grey market premium referred to a healthy stock listing on the NSE and BSE on Monday.
QSR operator is looking to raise Rs 1,838 Crore. The offer-for-sale (OFS), which was made by the existing shareholder and promoter, was for equity shares of Rs 440 crore.
"Devyani International is one of the largest and most recognizable operators in India.
India's fastest-growing QSRs (Quick Service Restaurants). This company is the largest
Franchisee of Yum brands India, operates brands KFC & Pizza Hut
Its banner. Despite pandemic-related disruptions, the segment recorded a strong revenue CAGR (18%) in FY19-21 to Rs 644 crore. The segment also saw a 19% increase in gross profit and a 68 percent gross profit margin in FY21, according to ICICI Direct Research.
DIL is also a Costa Coffee franchisee in India. The core brands KFC, Pizza Hut, and Costa Coffee contribute 94% of the company's topline. The rest is from international operations (own brand like Vaango & Food Street). Core brands store count grew at 14% over the past two years, to 605 stores by March 2020. It stated that the company plans to expand its core brands into existing and new cities, as the QSR market is expected to grow at 12% CAGR over five years (higher then historical CAGRs of 5.5%), supported in part by rising urbanisation.