Devyani International Limited Its initial public offering (IPO) closed on the first day of membership on Thursday. KFC and the Pizza Hut chain operator saw 6.73x more subscriptions in their public offering. As per the subscription data on the exchanges, the company had received bids for 78.78 crore equity shares against the issue size of 11.25 crore shares. in the first half of the day, IPO The size was reduced from 20.42 crore equity shares to 11.25 crore shares after the company raised a massive Rs 824.87 crore from anchor investors before making its market debut. Anchor investors saw an allocation of 9.16 crores to them; 62 anchor investors were involved in this subscription phase.
As far as investor subscription is concerned, the retail investor segment accounted for the highest subscription among all other categories. Retail investors had subscribed a total of 23.16 times the issue against their allotted share. Subsequently, non-institutional investors (NIIs) got subscribed 6.68 times their allocation. The subscription of Qualified Institutional Buyers (QIBs) was 1.32 times their reserve share. Employee membership also accounted for a portion of the overall membership numbers as they subscribed Devyani International IPO 3.12 times what was allotted to them. In terms of reservation, 75 per cent reservation was given to QIBs. NII and retail investors were given a reserve share of 15 per cent and 10 per cent, respectively.
Devyani International came out with an issue size of Rs 1,838 crore which included a fresh issue and offer for sale (OFS). The fresh issue was of Rs 440 crore and the OFS was up to Rs 1,398 crore with 155,333,330 equity shares having a face value of Re 1 per share. The issue price band was Rs 86 to Rs 90 per equity share.
The Gray Market Premium (GMP) for Devyani International as on August 6 was Rs 65. This is an increase of Rs 5 over the previous day’s GMP. This indicated that the shares were trading at a premium of Rs 151 to Rs 155 per equity share in the unlisted market.
Speaking about the company’s financial position till the IPO, ICICI Direct in a note said, “DIL is the largest franchisee of KFC in India, contributing 57 per cent to its total topline. Registered a strong revenue CAGR of 18 per cent in 21.644 crores, despite the disruption caused by the pandemic. The Gross Profit of the segment also grew at a CAGR of 19 per cent and recorded its best ever Gross Profit Margin (68 per cent) in FY21 On the cost front, while all marketing expenses of KFC are managed by Yum Inc., DIL pays 6 per cent of its gross revenue as fixed royalty.
Devyani International is one of the largest quick-service restaurant (QSR) chains in the country, with a strong presence in India as well as abroad. The company has three main verticals that contribute to its revenue. The first and foremost are the major brands, KFC and Pizza Hut. The second vertical is its international business and the third vertical is the other business that comes under the brand’s banner. These other businesses include names like Wango’s, Food Street, Masala Twist, Ile Bar, Amreli and Krush Juice Bar.
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