Updated: August 4, 2021 9:50:24 am
Devyani International IPO: The initial public offering (IPO) of Devyani International, the largest franchisee of fast food majors Pizza Hut, KFC and Costa Coffee in India, will open for subscription on Wednesday, August 4, 2021, at a price band of Rs 86-90 per share. The offer will be available till Friday, August 6, 2021.
Devyani International is an associate company of RJ Corp, the largest bottling partner of food and beverages (F&B) major Pepsico, and has interests in the Indian retail F&B sector. It is the largest franchisee of Yum Brands, operating core brands such as Pizza Hut, KFC, Costa Coffee besides its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrussh Juice Bar.
Through the upcoming offer, Devyani International aims to raise Rs 1,838 crore with the help of a fresh issue of equity shares worth Rs 440 crore and an offer-for-sale (OFS) of up to 155,333,330 equity shares worth Rs 1,398 crore by promoter and existing shareholder. Under the OFS, Dunearn Investments (Mauritius) Pte Ltd, a wholly-owned subsidiary of Temasek Holdings, will offload 6,53,33,330 shares and promoter RJ Corp will sell 9 crore shares.
The IPO includes a reservation of up to 5.50 lakh equity shares for the company’s employees. Also, 75 per cent of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional buyers and the remaining 10 per cent for retail investors.
The proceeds from the fresh issue will be used to retire debt and general corporate purposes.
At present, Devyani International operates 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee as of March 2021 in India. It’s led by Ravi Kant Jaipuria, promoter of RJ Corp and Virag Joshi, President and CEO.
Investors who wish to subscribe to the Devyani International IPO can bid in a lot of 165 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,850 to get a single lot of Devyani International. The shares will be listed on both BSE as well as the National Stock Exchange (NSE).
The applicants also must note that the cut-off time for UPI mandate confirmation is Monday, August 9, 2021, upto 12:00 pm. If they fail to do so then their application may not be considered.
Kotak Mahindra Capital Company, CLSA India and Edelweiss Financial Services are the global coordinators and book running lead managers, while Motilal Oswal Investment Advisors is the book running lead manager to the IPO. Link Intime India is the registrar of the issue.
Before heading into the IPO, Devyani International raised over Rs 824.87 crore (Rs 8,24,87,24,910) from 63 anchor investors in lieu of 9,16,52,499 equity shares at Rs 90 each, data from the stock exchanges showed.
The anchor investors include the likes of Abu Dhabi Investment Authority, Aditya Birla Sun Life Mutual Fund (MF), Fidelity MF, Goldman Sachs India, Government of Singapore, ICICI Prudential MF, Nippon Life MF, Tata MF, HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, Sundaram MF, SBI Life Insurance Company, Aditya Birla Sun Life Insurance Company, Bajaj Allianz Life Insurance Company and Max Life Insurance Company among others.
The research team at Anand Rathi Share and Stock Brokers in their IPO note have recommended a “Subscribe” to the offer.
Anand Rathi Research in its report said, “At the upper end of the IPO price band, Devyani International Ltd. is offered at 9.5x market capitalization/sales as per FY21 financial statement, compared to peers like Jubilant Foodworks Ltd. (15x), Westlife Development Ltd. (8.8x), Burger King India Ltd. (14x). We believe the company remains well placed for long term growth considering the company’s portfolio of recognized global brands catering to a range of customer preferences, cross brand synergies, expansion of store network and EBITDA positive earnings; we give this IPO a “Subscribe” rating.”
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