Sapphire Foods IPO, which has already started for subscription, was 49 percent subscribed at the end of the first day of the initial sale. This was mainly due to growing interest among retail investors to subscribe to the company’s first public offering, which runs popular fast food chains such as KFC, Pizza Hut and Taco Bell in India, Sri Lanka and the Maldives, among other countries. On the day, Sapphire Foods India Limited IPO According to reports, bids were received for 47,11,212 equity shares or 49 per cent per month against the total issue size of 96,63,468 equity shares.
The quota set aside for retail investors was subscribed 2.56 times, while the portion reserved for non-institutional buyers was subscribed only 5 per cent. As of Monday afternoon, qualified institutional buyers have booked only 2 per cent of the issue. Investors can book Neelam Foods IPO Until Thursday 11 November.
Neelam Foods IPO Details
Sapphire Foods is planning to raise Rs 2,073 crore through an IPO that opened on Tuesday. The operator has fixed the price band for the initial public offering (IPO) at Rs 1,120 to Rs 1,180 per equity share.
The issue is purely offer-for-sale by the promoters QSR Management Trust and Sapphire Foods Mauritius. Investors in OFS include WWD Ruby, Amethyst, AAJV Investment Trust and Edelweiss Crossover Opportunities Fund. The Company will issue OFS 17,569,941 shares through Initial Public Offering. ICICI Securities said in a note that the offer would be 27.7 per cent of the company’s post-offer paid up equity share capital.
Sapphire Foods IPO GMP Today
On Monday, November 10, the gray market premium or GMP of Sapphire Foods IPO was trading at Rs 1,305, up Rs 125 or 10.6 per cent from the issue price of the company. Higher GMP indicated stronger listing for Neelam Foods India Ltd shares on NSE and BSE later this month.
Objectives of the issue
Sapphire Foods India Limited plans to reap the benefits of listing equity shares on the stock exchanges. The company will use the proceeds to enhance its brand name among its existing and potential customers and to create a public market for its equity shares in India. According to reports, it aims to leverage its listings and promote its brands.
Sapphire Foods IPO lot size
Investors who wish to buy shares from the Sapphire Foods IPO will be able to do so in multiples of 12 under the initial share sale and proceed further. This means that a share of KFC and Pizza Hut operator at the upper end of the price band will be priced at Rs 14,160.
company valuation
“Sapphire Foods benefits from positive industry growth trends, given its substantial market presence and scale. In addition, its strong relationship with YUM and continued focus on providing a great consumer experience bodes well for the company moving forward. However, the objective is to accelerate the conversion from unorganized food services and to explore opportunities for inorganic growth. The financial performance has not been good as revenue growth has declined and the company has incurred losses in each of the last three financial years. The long-term growth prospects look promising, but a turnaround in the company’s financial performance will be a significant monitorable,” Religare Broking said in a note to the company that operates KFC and Pizza Hut in India.
company financial
Sapphire Food India Limited’s performance in FY21 has been very poor, mainly due to the impact of the COVID-19 pandemic. While the company’s steady growth in the number of stores (from 376 in FY19 to 450 as of 1QFY22) has enabled it to register a huge growth in revenue in the last few years, except in FY2011, which was hit by the covid lockdown. , was affected by higher depreciation (on account of stores). Reliance Securities said surplus) and higher OPEX (due to lower occupancy), resulting in net loss to the company in the last three years.
However, on a positive note, the QSR business model has a strong cash generation potential due to the negative working capital cycle.
Should you subscribe?
Reliance Securities: The IPO is valued at 60.2x FY21 EV/EBITDA and 7.3x FY21 EV/Sales, at a slight discount to the recently listed Devyani International, which appears justified due to Devyani’s better margin profile. Fast food culture under QSR is expected to flourish in India due to increase in working class population and continuous urbanization. We note that the QSR business model is quite impressive, as each restaurant franchise begins to generate significant ROE at the restaurant level when it reaches a utilization level of >90 percent, which bodes well for long-term investors. Also, the better cash flow generating capacity of the business provides comfort. Hence, we recommend to SUBSCRIBE this issue for a long term perspective.
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