Pizza Hut, KFC operator Devyani International gets SEBI nod for IPO

Our Bureau Kolkata | Updated on July 20, 2021

The company could raise close to ₹1,400 crore, according to market sources

Devyani International, the largest franchisee of Yum Brands, operating core brands such as Pizza Hut, KFC and Costa Coffee besides its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrushh Juice Bar, has received the approval of Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO). The company filed its DRHP with SEBI on May 19, 2021.

According to information available in the DRHP, it would look to raise around ₹400 crore via issue of fresh equity shares and an Offer of Sale (OFS) of up to 125,333,330 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.

QSR chains to grow at 23% CAGR: Report

The company, which has close to 692 stores in 26 States in India, and in international markets like Nepal and Nigeria, could raise close to ₹1,400 crore, according to market sources.

QSR industry growth prospects

As on March 31, 2021, Devyani International operates 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee outlets in India. Between March 2019 and March 2021 the core brand stores saw a CAGR growth of around 14 per cent from 469 stores to 605 stores.

Devyani International files for IPO

The QSR (quick service restaurant) industry is estimated to grow at a CAGR of around 12 per cent between 2020 and 2025. In FY21 Devyani’s business from the core brands (India & Internationally) accounted for 94 per cent of its revenues from operations and delivery sales represented 70 per cent of the said revenues, an increase from 51 per cent in FY20.

Despite the Covid pandemic, the company has continued to expand its store network and has opened 109 stores across its core brand business in the last six months.

Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd, Motilal Oswal Investment Advisors Ltd have been appointed investment bankers to the issue.

Published on July 20, 2021

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