
Devyani International IPO: Key Details
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Company Information
Devyani International Limited, incorporated in 1991, is the largest franchisee of Yum Brands (KFC, Pizza Hut) in India and are among the largest operators of chain quick-service restaurants (“QSR”) in India, on a non-exclusive basis, and operate 655 stores across 155 cities in India, as of March 31, 2021, and 696 stores across 166 cities in India, as of June 30, 2021. In addition, they are a franchisee for the Costa Coffee brand and stores in India.
Their business is broadly classified into three verticals that include:
- Sores of KFC, Pizza Hut and Costa Coffee operated in India (Core Brand Business);
- Stores operated outside India primarily comprising KFC and Pizza Hut stores operated in Nepal and Nigeria (“International Business”); and
- Certain other operations in the F&B industry, including stores of their own brands such as Vaango and Food Street (“Other Business”)
Revenue from the Core Brands Business, together with the International Business, represented 83.01%, 82.94%, and 94.19% of the revenue from operations in Fiscals 2019, 2020 and 2021, respectively
Competitive Strengths
- Portfolio of highly recognized global brands catering to a range of customer preferences;
- Multi-dimensional comprehensive QSR player;
- Presence across key consumption markets with a cluster-based approach;
- Cross brand synergies with operating leverage;
- Disciplined financial approach with focus on cash flows and returns; and
- Distinguished Board and experienced senior management team.
Company Strategy
- Strategically expand store network of Core Brands Business
- Continue to improve unit-level performance
- Focus on delivery channel for Core Brands
- Invest in technology and focus on digital capabilities
Proceeds from fresh issue of Devyani International IPO will be used to:
- Funding longterm capital expenditure requirements and
- General corporate purposes
The proceeds from the Offer for Sale shall be received by the Selling Shareholder (i.e. Rivendell PE LLC).
Devyani International IPO: Financials
2019 | 2020 | 2021 | |
---|---|---|---|
Revenue from Ops | ₹1,310.6 Cr | ₹1,516.4 Cr | ₹1,134.8 Cr |
Profit before Excep* | ₹(71.14) Cr | ₹(111.49) Cr | ₹(139.28) Cr |
Profit after Tax | ₹(94.14) Cr | ₹(121.42) Cr | ₹(62.99) Cr |
EPS (Basic) | (0.75) | (1.14) | (0.50) |
As of March 2020 | EPS (Avg*) | P/E (Floor) | P/E (Cap) |
---|---|---|---|
Based on basic EPS | (0.76) | NA** | NA** |
Devyani International IPO: Comparison with listed industry peers
Company | P/E (Cap) | P/S |
---|---|---|
Devyani | – | 9 |
Jubilant Foodworks | 179.21 | 14.7 |
Burger King | NA* | 13.3 |
Westlife | NA* | 8.5 |
Sector Avg | 77.52 | 12.17 |
P/S – Price to Sales
Devyani International IPO Dashboard
Issue Details
Type | Value |
---|---|
Issue Size | ₹1,838 Cr |
Fresh Issue | ₹440 Cr |
Offer for Sale | ₹1,398 Cr |
Face Value | ₹1/- per Equity Share |
IPO Price | ₹86 – ₹90 |
Lot Size | 165 shares |
Lots | Min 1 – Max 13 |
Key Dates
Date Type | Date |
---|---|
Bid Open | 04/08/2021 |
Bid Close | 06/08/2021 |
Allotment Finalization | 11/08/2021 |
Initiation of Refunds | 12/08/2021 |
Credit of Shares | 13/08/2021 |
Listing Date | 17/08/2021 |
Lot Size and Price
Lots | Shares | Amount |
---|---|---|
1 | 165 | ₹14,850 |
13 | 2145 | ₹1,93,050 |
Promoter Holding
Holding | Percentage |
---|---|
Pre-Issue | 75.79 % |
Post-Issue | 67.99 % |
Devyani International IPO: Investor Quota and Shares Offered
Investor Type | Quota | Shares on Offer |
---|---|---|
QIB | 75% | [●] shares |
NII | 15% | [●] shares |
RII (Retail) | 10% | [●] shares |
Total | 100% | [●] shares |
Devyani International IPO: Risks
- They rely on arrangements with Yum for KFC and Pizza Hut stores that comprise a significant majority of the business, and termination of or inability to renew these arrangements will have a material adverse effect
- They have incurred losses in Fiscals 2019, 2020 and 2021, resulting in erosion of net worth
- Their Statutory Auditors have included certain adverse remarks/ qualifications/ matters of emphasis in Audited Consolidated Financial Statements
- The operation of stores/ outlets under the Core Brands (“KFC”, “Pizza Hut” and “Costa Coffee”) depend on their respective material agreements, which impose certain restrictions, limitations, and other obligations
For complete internal and external risk factors, you can refer to the RHP of the company.
Devyani International IPO: Registrar and Lead Managers
Registrar of the Issue
Link Intime
C-101, 247 Park
L B S Marg, Vikhroli (West)
Mumbai 400 083
Maharashtra, India
Phone: 022 4918 6200
Email: [email protected]
Lead Managers of the Issue
Kotak Mahindra Capital Company Limited
CLSA India Private Limited
Edelweiss Financial Services Limited
Motilal Oswal Investment Advisors Pvt Ltd
Phone: +91 22 4336 0000 / +91 22 6650 5050
Email: [email protected]