Devyani International, the largest franchisee of Yum Brands and one of the largest operators of chain quick service restaurants in India, has fixed the price band at Rs 86-90 per equity share for its initial public offering, as per the information available in daily newspapers on July 30.
The public issue, which will open on August 4, comprises a fresh issue of Rs 440 crore, and an offer for sale of 15,53,33,330 equity shares by Dunearn Investments (Mauritius) Pte Ltd and promoter RJ Corp. The total fund raising comes to Rs 1,838 crore at higher price band.
Dunearn Investments is going to offload 6,53,33,330 equity shares, and RJ Corp will sell 9 crore equity shares through offer for sale. The company reserved 5.5 lakh equity shares of its IPO for employees.
The offer will close on August 6. Anchor book, if any, will be open for a day on August 3, a day before the IPO opening.
Investors can bid for a minimum of 165 equity shares and in multiples of 165 equity shares thereafter. Up to 75 percent of total offer has been reserved for qualified institutional buyers, 10 percent for retail investors and 15 percent for non-institutional investors.
The operator of KFC, Pizza Hut, and Costa Coffee chains will utilise net proceeds from its fresh issue for repaying of debts, while the offer for sale money will go to selling shareholders.
Investors seem to be more excited about Devyani International IPO especially after the great success seen by listings of Zomato, Burger King India, and Barbeque Nation Hospitality.
The company commenced relationship with Yum in 1997, when it opened first Pizza Hut store in Jaipur, and subsequently it continued to expand operations with both KFC and Pizza Hut franchises. As of June 2021, it operated 284 KFC stores and 317 Pizza Hut stores in India.
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In addition, it is a franchisee of the Costa Coffee brand in India, which is owned by Costa, and operated 44 Costa Coffee stores as of June 2021. Despite the ongoing Covid-19 pandemic, the company continued to expand its store network and in the six months ended March 2021, it opened 109 stores in Core Brands Business (KFC, Pizza Hut, and Costa Coffee).
Yum! Brands Inc. operates brands such as KFC, Pizza Hut and Taco Bell brands and has presence globally with more than 50,000 restaurants in over 150 countries, as of December 2020.
Devyani International reduced its loss in FY21 to Rs 62.98 crore from Rs 121.42 crore in FY20. Revenue in same period declined to Rs 1,134.84 crore from Rs 1,516.4 crore.
Promoters of the company are Ravi Kant Jaipuria, Varun Jaipuria, and RJ Corp, having 75.79 percent shareholding as of now. Among public shareholders, Dunearn has 14.07 percent shareholding in the company.
Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services, and Motilal Oswal Investment Advisors are the book running lead managers to the issue.