Devyani International Limited is opening its initial public offering (IPO) on August 4, 2021. The quick-service restaurants (QSR) chain operator is eyeing a problem size of Rs 1,838.00 crore through its IPO. the corporate was incorporated in 1991. it’s the brand strength of being one among the most important franchisees in India. it’s the most important franchisee of YUM Brands and has many popular brands thereunder like Pizza Hut, KFC, and Taco Bell. Devyani International has 655 stores across 155 cities in India. It even features a significant international presence with over 50,000 restaurants in 150 countries. With this highly-anticipated IPO hitting the market on Wednesday, here is what you would like to understand before jumping in and subscribing to the difficulty .
1) Devyani International Limited IPO Price Band, Issue Size
The Devyani International IPO has a problem size of Rs 1,838 crore. the difficulty is formed from a fresh issue and a suggestion purchasable (OFS). The Fresh Issue stands at Rs 440 crore with 48,888,888 shares, while the OFS stands at Rs 1,398 crore with around 155,333,330 equity shares that carry a face value of Rs 1 per equity share. The IPO itself will open on August 4 and shut on Transfiguration . Any anchor bookings that happened would have happened on August 3. the worth band for the difficulty was Rs 86 to Rs 90 per equity share for the difficulty .
2) Devyani International IPO Grey Market Premium (GMP)
The GMP was Rs 55 on August 4 at around 08:20 IST. this means that the difficulty was trading premiums on the unlisted market at roughly Rs 141 to Rs 145 per equity share against the listed price band.
3) Devyani International IPO Lot Size
The company features a minimum lot size of 165 shares with an application amount of Rs 14,850 for the lower end of the lot. The upper limit of the lot size was listed at 2,145 shares that carried a minimum application amount of Rs 193,050. Retail investors are allowed to use for up to 13 lots at the upper limit, which stands at 2,145 shares.
4) Reserved Portion for Investors within the Public Issue and Subscriptions
The company has three categories of investors – qualified institutional buyers (QIBs), non-institutional investors (NIIs) and retail investors. Out of all three categories, the QIBs have the very best reserved portion with a 75 per cent allocation. The NIIs have an allocation of 15 per cent and therefore the retail segment have a reservation of 10 per cent.
The IPO was subscribed a complete of 0.81 times on August 4 at approximately 12:10 IST. The retail investors subscribed 4.13 times. The QIB and NII categories subscribed 0.00 times and 0.09 times respectively. there have been also subscriptions from the worker category that stood at 0.23 times during an equivalent time.
5) Devyani International IPO Objective
The company is possibly looking to only stabilise the operations and its financials because the object of the difficulty was listed as using the funds for repayment and pre-payment for company borrowings. this is often either fully or partially. the opposite portion of the funds is probably going to travel towards expenditure on general corporate purposes.
6) Important Post-IPO Dates
The IPO will close on Transfiguration , Friday. After this is often when investors got to keep an ear to the bottom . the idea of allotment will likely get on August 11. The refunds to unlucky bidders and therefore the accreditation to the successful investors will probably happen on August 12 and 13 respectively. The listing date for the difficulty on the NSE and therefore the BSE will likely happen on August 16, which remains to be confirmed.
7) Promoter Group and IPO Leads
The group of promoters for the difficulty consists of Ravi Kant Jaipuria, Varun Jaipuria, and RJ Corp Limited. the worldwide coordinators and book running lead managers for the difficulty are Kotak Mahindra Capital Company Limited, CLSA India Private Limited, Motilal Oswal Investment Advisors Limited and Edelweiss Financial Services Limited.
8) Devyani International Ltd. Overview
The company was incorporated in 1991. it’s big-brand verticals driving its stature within the industry. The three main verticals of the franchisee’s chain are the core brands which are made from KFC, Pizza Hut and Costa Coffee in India. The second vertical is that the international presence in Nepal and Nigeria. The third vertical consists of other brands like Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar. What started as one Pizza Hut store in Jaipur, expanded to KFC also . Not the corporate operates 264 KFC stores, 297 Pizza Huts, and 44 Costa Coffee outlets in India alone.
9) Company Financials
Devyani International managed to bring down its losses in FY21 to Rs 62.98 crore from Rs 121.42 crore in FY20 when the pandemic was at an all-time high. The revenue for an equivalent time-frame went down also to Rs 1,134.84 crore from Rs 1,516.4 crore. the corporate saw a slow recovery between 2020 and 2021, however, it did recover. The recovery of the corporate aside, the industry has also seen significant growth. Speaking on the expansion of the QSR chain industry Ajit Mishra the VP of Research from Religare Broking said, “The value sales of quick-service restaurants grew by a CAGR of 5.5% and amounted to Rs. 2,854.8 billion in 2020 from Rs. 2,189.2 billion in 2015. the amount of outlets increased by 2% while the amount of transactions increased by 3.8% over an equivalent period.”
10) do you have to subscribe the IPO? Analyst Outlooks
Mishra said during a Religare Broking note, “Devyani is well placed to profit from growing industry trends because it features a strong portfolio of highly recognized global brands which cater to a variety of customer preferences. Its close association with Yum along side its technical, marketing and operational expertise has enabled them to determine itself as a comprehensive player within the QSR industry in India. it’s a robust presence in key consumption markets. Moreover, the corporate has been ready to leverage substantial operating synergies across the brands during which it operates.”
He added that the corporate is looking to expand its store network for its core brands and is eyeing a delivery-oriented approach with attention on digital capabilities. Mishra noted that the corporate has made an honest recovery all things considered which improving its unit performance will aid in better margins down the road .
“The financial performance has been tepid for the corporate which has further got impacted in FY21 thanks to the pandemic. However, the corporate intends to enhance its unit performance which might aid better margins. Considering the present market sentiments, investors may subscribe for listing gains,” said Mishra.
