Many doing it tough before mass lockdowns

#Barbeceu Nation, #Burger King, #CLSA, #Costa Coffee, #Devyani, #DRHP, #Edelweiss Financial Services, #IPO, #KFC, #Kotak Mahindra Capital, #OFS, #Pizza Hut, #Temasek, #Yum!

Food and beverages major Devyani International, the largest franchisee of Pizza Hut, KFC and Costa Coffee in India is likely to launch its IPO ( initial public offer) between 4th August to 6thth August, 2021 , multiple industry sources with knowledge of the matter told Moneycontrol.

The firm had announced the Sebi approval for its DRHP ( draft red herring prospectus) on 19th July, 2021 to raise around Rs 1,400 crores and the final size may possibly be increased , these sources added.

Devyani International is an arm of diversified conglomerate RJ Corp, the largest bottler for Pepsi Co in India and it also counts Yum! Brands, the second-largest QSR (quick-service restaurant) company in the world, and Singapore’s Temasek as investors.

The moves comes close on the heels of the big-bang Zomato listing which has shaken up the food segment and would make Devyani International, the third QSR ( quick service restaurant) player to list on the domestic bourses in recent times post Burger King and Barbecue Nation.

“ Devyani International plans to launch the IPO on 4th August and as of now the plan is for the listing to take place on 16th August,” one of the individuals above told Moneycontrol adding that the dates may change depending on market conditions.

A second individual confirmed the likely launch and listing timeline.
A third person also confirmed both the likely dates .

All the three individuals above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol has sent an email query and could not immediately elicit a comment from the firm and its backers.

The shares of listed peers Burger King & Barbeceu Nation have risen by 26 per cent and 27 per cent respectively in the last 3 months.

The listing plans of Devyani International were first reported by Moneycontrol on February 19, 2021.

Read: KFC, Pizza Hut, Costa Coffee operator Devyani International to join QSR IPO wave; backed by restaurant giant Yum! Brands

According to it’s DRHP filing, the IPO is a mixture of primary and secondary issue of shares with a fresh issue component of Rs 400 crore and an OFS

(offer for sale) component up to 125,333,330 equity shares.

Kotak Mahindra Capital, Edelweiss Financial Services, CLSA and Motilal Oswal are the investment banks working on the deal. Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas are the legal advisors according to the DRHP.

In a related development, on December 18, 2020, Moneycontrol had also reported the 2021 listing plans of another restaurant operator Sapphire Foods, which backs KFC, Pizza Hut and Taco Bell and counts Goldman Sachs and Samara Capital as its investors.

Also Read: Exclusive | KFC, Pizza Hut operator Sapphire Foods eyes 2021 IPO; backed by Goldman Sachs, Samara Capital

FOOD FOR THOUGHT!

Besides operating core brands such as Pizza Hut, KFC and Costa Coffee, Devyani International also has its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrussh Juice Bar having 692 stores in 26 states across 155 cities in India, as well as, internationally in Nepal and Nigeria.

The firm, which has 9.356 employees, 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% from 469 stores to 605 stores.

In FY21 Devyani’s business from the core brands (India & Internationally) accounted for 94.19% of its revenues from operations and delivery sales represented 70.20% of the said revenues, an increase from 51.15% in FY20. The company said recently that despite the pandemic, it has continued to expand its store network and has opened 109 stores across its core brand business in the last 6 months.

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