Devyani International, the largest franchisee of Pizza Hut, KFC and Costa Coffee, has filed a draft red herring prospectus (DRHP) with market regulator SEBI to launch a Rs 1,400-crore IPO. The public issue comprises fresh issue of equity shares worth Rs 400 crore and an offer-of-sale (OFS) of up to 12.5 crore equity shares by Investor Selling Shareholder, Dunearn Investments (Mauritius) Pte. Ltd, a wholly-owned subsidiary of Temasek Holdings and Promoter Selling Shareholders, RJ Corp Ltd. This will be the third restaurant chain to come up with an IPO in the recent time, following the successful listing of Burger King India and Barbeque-Nation Hospitality. In addition, Mrs Bectors Food Specialities, the largest supplier of buns to QSR chains such as McDonald’s, KFC, Burger King and Carl’s Jr, also made a stock market debut last year in December.
All you need to know about Devyani International IPO
– Investment Bankers appointed to the issue are Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd and Motilal Oswal Investment Advisors Ltd. The registrar to the issue is Link Intime India Private Ltd.
– The company has planned to utilise the net proceeds towards funding of repayment/prepayment of all or certain of the company’s borrowings worth Rs 357.8 crore and for general corporate purposes.
– Devyani is the single largest QSR company in India to be listed on Swiggy and was amongst the largest QSR company in India to be listed on the Zomato platform in 2019 and 2020. It is expected that the sale value of the QSR industry will grow at a CAGR of 12.4 per cent between 2020-25.
– Devyani International Ltd commenced its relationship with Yum in 1997 with its first Pizza Hut store in Jaipur. It’s also a franchisee of the Costa Coffee brand and currently operates 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee as on March 31, 2021 in India. Between March 2019-2021 the core brand stores saw a CAGR growth of 13.58 per cent from 469 stores to 605 stores and the company attributes its success and continuous growth effort to its 9,356 employees, according to DRHP.
– Revenue from operations from KFC and Pizza Hut stores together represented 76.08 per cent, 77.49 per cent and 92.28 per cent of Devyani International’s total revenue from operations, in fiscals 2019, 2020 and 2021, respectively.
– Devyani International Ltd is led by Ravi Kant Jaipuria, Promoter, RJ Corp and Virag Joshi, President & CEO, who been a key strategist to the expansion efforts by the company in addition to the management team comprising of Manish Dawar, Wholetime Director and Chief Financial Officer, Rajat Luthra, CEO — KFC and Amitabh Negi, CEO — Pizza Hut.
– Amid the COVID-19 pandemic, Devyani has continued to expand its store network and has opened 109 stores across its core brand business in the last 6 months. KFC and Pizza Hut were amongst the earliest to roll out contactless delivery in May 2020 and June 2020, respectively.