Shares of this quick-service restaurant (QSR) company, which owns popular brands such as Domino’s, Dunkin’ Donuts, and Popeyes, are expected to benefit from the Rs.125 billion investment by its parent company’s promoters to acquire a 40 percent stake in Coca-Cola’s bottling division.
Share Price Movement
In Monday’s trading session, Jubilant FoodWorks Ltd share price hit an intraday high of Rs.637.35 per share, marking a 3.5 percent rise from its opening price of Rs.615.75 apiece. However, the stock later pulled back, closing at Rs.619.80 per share.
What is the News
Jubilant Foodworks Ltd parent company, Jubilant Bhartia Group, led by promoters Shyam and Hari Bhartia, is reportedly in discussions with asset managers, mutual funds, and foreign banks to raise Rs.12,500 crore for the acquisition of a 40 percent stake in Hindustan Coca-Cola Beverages (HCCB), as reported by *The Economic Times*.
The acquisition of Coca-Cola’s bottling arm is likely to benefit Jubilant FoodWorks, as it could strengthen the distribution of Coca-Cola products through its extensive network of food chains and global presence.
The negotiations involve firms such as Apollo Global Management, Ares Management, Bain Capital, and Kotak Alternate Asset Managers, with the aim of securing at least one-third of the total amount, or Rs.4,000-5,000 crore. Shamit Bhartia, non-executive director at Jubilant Industries, is spearheading these talks.
HCCB is reportedly looking to replicate PepsiCo’s asset-light, value-unlocking strategy, which is expected to facilitate a potential public listing and aid in price discovery.
Coca-Cola’s Listing Plans
Coca-Cola’s plans to list HCCB, inspired by the asset-light model used by competitor PepsiCo, are viewed as a key aspect of the deal. The stake sale is anticipated to facilitate price discovery ahead of HCCB’s potential IPO in the coming years.
If regarded as a quasi-equity instrument, this deal may not feature a coupon, distinguishing it from traditional debt transactions. Furthermore, it is unlikely to involve any security linked to the shares of the group’s listed entities, such as Jubilant Foodworks.
Brand Portfolio
Jubilant FoodWorks, the Jubilant Bhartia group’s food service arm, holds exclusive franchise rights for Domino’s Pizza in several countries and has expanded into brands like Popeyes and Dunkin’ Donuts, becoming a leader in the Indian food service market.
Financials
In its latest financial update, the company reported remarkable net sales of Rs.1,933 crore for Q1 FY25, reflecting a 45 percent increase from Rs.1,335 crore in Q1 FY24. Moreover, net profits surged by 100 percent to Rs.58 crore in Q1 FY25, compared to Rs.29 crore in Q1 FY24, highlighting significant growth during this period.
About the company
Jubilant FoodWorks Limited is India’s largest food service company, established in 1995 as a part of the Jubilant Bhartia Group. It operates a significant network of approximately 2,007 restaurants across 421 cities in India, with a strong presence in the pizza segment through nearly 2,000 Domino’s outlets.
Written by – Siddesh S Raskar
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