Quick service restaurant player Devyani International gets SEBI approval for IPO

IPO | Representative image

Devyani International Limited (DIL), the largest franchisee of Yum Brands, on July 19 announced that it has received market regulator Securities and Exchange Board of India’s (SEBI) nod for its Initial Public Offering (IPO). The firm had filed its DRHP with SEBI on May 19, 2021.

Devyani International in its Draft Red Herring Prospectus (DRHP) had mentioned that with its IPO, it is looking to raise Rs 400 crore via issuance of fresh equity shares and an Offer of Sale of up to 125,333,330 equity shares by investor selling shareholder, Dunearn Investments (Mauritus) Pte. Ltd -- a wholly owned subsidiary of Temasek Holdings --  and Promoter Selling Shareholders, RJ Corp Ltd. DIL plans to raise Rs 1,400 crore.

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Yum Brands operates core brands including Pizza Hut, KFC, and Costa Coffee, besides its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrussh Juice Bar. These stores are located in 26 states across 155 cities in India, as well as in Nepal and Nigeria.

In 1997, DIL commenced its relationship with Yum with its first Pizza Hut store in Jaipur. Currently, DIL operates 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee as on March 31, 2021, in India. Between March 2019 and 2021 the core brand stores saw a CAGR growth of 13.58 percent from 469 stores to 605 stores and the company attributes its success and continuous growth effort to its 9,356 employees.

DIL also became the single largest QSR company in India to be listed on Swiggy and was among the major QSR companies in India be to listed on the Zomato platform in 2019 and 2020. The sale value of the QSR industry will grow at a CAGR of 12.4 percent between 2020 and 2025, according to experts.

Devyani’s business from the core brands in FY 2021 accounted for 94.19 percent of its revenues from operations, and delivery sales represented 70.20 percent of the said revenues, which is an increase from 51.15 percent in FY20.

During the pandemic too, DIL opened 109 stores across its core brand business in the last 6 months.

Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd, Motilal Oswal Investment Advisors Ltd have been appointed as investment bankers to the issue.