Devyani International IPO Review 2021: Pizza Hut, KFC, Costa Coffee, and Taco Bell operator i.e. Devyani International Ltd. IPO will hit the Indian markets from August 4th to August 6th. They aim to raise Rs. 1,213.33 crores through a public offering.
In this article, we look into important information on the Devyani International IPO and find out the possible prospects of the company.
Table of Contents
Devyani International IPO Review – About the Company
Founded in 1991, Devyani International Ltd. is the largest quick-service restaurant (QSR) chain operator in India operating brands like Pizza Hut, KFC, Taco Bell, and Costa Coffee. As of March 31, 2021, the company operated 655 stores across 155 cities in India.
Devyani Internationals operates through 3 business verticals i.e. KFC, Pizza Hut, and Costa Coffee. The company initially started off with a Pizza Hut store in Jaipur, eventually expanding into KFC too.
As of 31st March 2021, the company operated 264 KFC stores, 297 Pizza Hut stores, and 44 Costa Coffee stores in India. The company has maintained a strong presence in metro cities across India. They have not only expanded across India but also Internationally into Nepal and Nigeria.
Devyani’s other QSR business verticals (KFC Pizza, Hut, and Costa Coffee) include Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar.
As of FY2021 their core brands made up 85% of their sales domestically and 95% including international sales. The remaining 5% of sales came from its other business verticals.
The company like many others in the industry too suffered from the effects of Covid-19. Devyani’s revenue dropped by 25% during the pandemic. The QSR giant however adapted using other channels like food delivery during the lockdown using Zomato and Swiggy.
The pandemic however failed to slow down the growth of DIL. They instead opened 109 core brand business stores across the country in the last 6 months.
The fast market shows immense promise in the country thanks to the huge untapped market size of the country. The brand run by Devyani mainly targets the younger population. The revenues of the foodservice sector are expected to grow at a CAGR of 15.5% from 2020 to 2025.
Grey Market Premium of Devyani International IPO
The shares of Devyani International were trading at around a 68% premium in the grey market before the IPO. The shares traded at a price of Rs. 149 giving them a premium of Rs.62 over their issue price band of Rs 86-90 per share.
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Devyani International IPO Review – Key IPO Information
The promoters of the company are Ravi Kant Jaipuria, Varun Jaipuria, and RJ Corp Ltd. The Rs. 1,838 crore issue also includes an offer for sale by existing investors Dunearn Investments and RJ Corp for Rs. 1,398 crores.
They have appointed Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd, Motilal Oswal Investment Advisors Ltd as the lead managers to the issue. Link Intime India Private Ltd has been appointed as the registrar.
| Particulars | Details |
|---|---|
| IPO Size | ₹1,838.00 Cr |
| Fresh Issue | ₹440.00 Cr |
| Offer For Sale(OFS) | ₹1,398.00 Cr |
| Opening Date | Aug 4, 2021 |
| Closing Date | Aug 6, 2021 |
| Face Value | ₹1 per equity share |
| Price Band | ₹86 to ₹90 per equity share |
| Lot Size | 165 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Aug 16, 2021 |
Purpose of the Devyani International IPO
- Repayment and/or prepayment of the company’s borrowings fully or partially.
- General corporate purposes.
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In Closing
The IPO opens on 4th August and closes on 6th August 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Devyani International Ltd.
That’s all for this post. Do let us know what you think of the Devyani International IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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