Devyani International IPO: 9 things to know about listing of the KFC, Pizza Hut operator

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Devyani International, the largest franchisee of Yum Brands and one of the largest operators of chain quick-service restaurants in India is coming out with its initial public offer next week. Here are all the details about the offer.

Open and close date: The offer will open for subscription on August 04 and the bidding will close on August 06. The anchor book, if any, will open for a day before the issue opening, i.e. August 03.

Price band: The price band for the quick-service restaurant has been fixed at Rs 86-90 per share having a face value of Rs 1 per share.

Lot size: Investors can bid for a minimum of 165 equity shares and in multiples, thereafter, translating to a minimum bidding amount of Rs 14,850 at the higher end of the price band. A retail investor can at max apply for 13 lots or 2,145 shares for Rs 1,93,050.

Issue size: The Rs 1,838-crore public offer comprises fresh issuance of equity shares of Rs 440 crore, and an offer for sale (OFS) of 15,53,33,330 shares totalling Rs 1,398 crore by Dunearn Investments (Mauritius) Pte Ltd and promoter RJ Corp. Dunearn Investments is going to offload 6,53,33,330 equity shares, and RJ Corp will sell 9 crore equity shares through an offer for sale. The company reserved 5.5 lakh equity shares of its IPO for employees.

Objective of issue: The operator of KFC, Pizza Hut, Costa Coffee will utilise the net proceeds of fresh issue towards repayment and/or prepayment of the company’s borrowings fully or partially and for general corporate purposes.

What’s in it for retail investors: Not more than 75% of the total offer has been reserved for qualified institutional buyers, up to 10% for retail investors, and the rest 15% for non-institutional buyers.

About the company: Devyani International Ltd is the largest franchisee of Yum Brands and among the largest quick-service restaurants (QSR) chain operators in India with 655 stores across 155 cities all over the country as of Mar 31, 2021. Yum Brands Inc operates many fast-food brands i.e. Pizza Hut, KFC, and Taco Bell brands. The company operates 264 KFC stores, 297 Pizza Hut stores, and 44 Costa Coffee stores in India as of March 31, 2021.

The company has three business verticals that is of Core Brands that hold franchises of KFC, Pizza Hut, and Costa Coffee stores in India. While the international business vertical houses its stores in foreign countries like Nepal and Nigeria. Whereas under other business vertical it operates own branded stores i.e. Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar.

For the financial year ended March 31, 2021, the company reported total revenue of Rs 1,198.90 crore compared to Rs 1,323.68 crore in FY19. While the company reported a loss of Rs 81.32 crore in FY21 versus loss of Rs 59.29 crore posted in FY19.

Book Running Lead Managers and Registrar to the IPO: The book running lead managers to the issue are Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services, and Motilal Oswal Investment Advisors. The registrar to the issue is Link Intime.

Issue timeline: The issue is likely to finalize the basis of allotment by August 11, and the initialization of refunds will take place by August 12. While the credit of equity shares to depository accounts of the allottee will be done on August 13. The company is expected to make its stock market debut on August 16, 2021.