Devyani International Limited IPO Details and Review

Dates, Price band, Lot size, Risks, Review and broker recommendations etc.
Devyani International IPO

Devyani International IPO: Key Details

  • Grey Market Premium (GMP) today: ₹60 – ₹65

Note: We neither trade nor encourage our readers to trade in the Grey Market. We share the GMP information for educational purposes only, so that, you can make an informed decision.

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

201920202021
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)
*Tax and Exceptional Items
As of March 2020EPS (Avg*)P/E (Floor)P/E (Cap)
Based on basic EPS(0.76)NA**NA**
* Weighted Average for last 3 years, **Not Applicable – Negative P/E

Devyani International IPO: Comparison with listed industry peers

CompanyP/E (Cap)P/S
Devyani9
Jubilant Foodworks179.2114.7
Burger KingNA*13.3
Westlife NA*8.5
Sector Avg77.5212.17
*Not Applicable – Negative P/E for Burger King and Westlife
P/S – Price to Sales

Devyani International IPO Dashboard

Issue Details

TypeValue
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 Size165 shares
LotsMin 1 – Max 13

Key Dates

Date TypeDate
Bid Open 04/08/2021
Bid Close 06/08/2021
Allotment Finalization11/08/2021
Initiation of Refunds12/08/2021
Credit of Shares13/08/2021
Listing Date17/08/2021

Lot Size and Price

LotsSharesAmount
1165₹14,850
132145₹1,93,050

Promoter Holding

HoldingPercentage
Pre-Issue75.79 %
Post-Issue67.99 %

Devyani International IPO: Investor Quota and Shares Offered

Investor TypeQuotaShares on Offer
QIB75%[●] shares
NII15%[●] shares
RII (Retail)10%[●] shares
Total100%[●] 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]

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