Devyani International makes robust market debut; lists at 56.67% premium

Shares of Pizza Hut, KFC, and Costa Coffee operator Devyani International made a robust market debut on Monday. The stock opened for trading at Rs 140.90 on the National Stock Exchange, compared to the issue price of Rs 90, marking a premium of 56.56% or Rs 50.9. On the BSE, Devyani International opened at Rs 141, at a premium of 56.67%.

The Rs 1,838-crore public offer was subscribed 116.71 times on the final day of the bidding process on August 6. The public offer received bids of 13,13,77,99,700 shares against the offered 11,25,69,719 equity shares. The portion reserved for retail investors was subscribed 39.51 times. While the qualified institutional buyer category was subscribed 95.27 times, the non-institutional investor category was subscribed 213.06 times and employee reserved category was subscribed 4.70 times.

The quick-service restaurant public offer comprised of 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.

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.

Devyani International 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.