Devyani International is accessing the capital markets with its upcoming IPO. With this, investors can get a chance to invest in KFC IPO and Pizza Hut IPO as Devyani International is the operator of these two popular fast-food chains.
Overview of the Company and its IPO
- Devyani International Limited is one of the largest fast-food companies in India. It is also the largest franchisee of American fast-food major Yum Brands. It started in 1997, in partnership with Yum, with its first Pizza Hut branch in Jaipur.
- As at the end of last financial year, it had operations of Rs. 605 crores, with 297 Pizza Hut stores, 264 KFC stores, and 44 Costa Coffee outlets. The company is majorly led by RJ Corp, President and CEO Virag Joshi, and Ravi Kant Jaipuria.
- Other than Pizza Hut, KFC, and Costa Coffee, the company operates brands such as Vaango, Taco Bell, coffee chain costa coffee, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar.
- Devyani International Ltd (DIL) has filed Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) to raise fund shares of nearly Rs. 1,400 crores through an initial public offering (IPO).
- According to the DRHP filed with SEBI, this offer includes an issue of fresh equity shares worth Rs. 400 crores, and an offer-for-sale (OFS) of Rs 12.5 crores (125.33 million) equity shares by the promoter and existing shareholders.
- Under the (offer-for-sale) OFS promoter RJ Corp will offer 6 crore shares, and 6.5 crore shares will be sold to Dunearn Investments (Mauritius) Pte Ltd, a wholly-owned subsidiary of Temasek Holdings.
- DIL will likely join the restaurant chain to file for IPO, along with the successful listings of Barbeque-Nation Hospitality and Burger King India
- The firm plans to use the proceeds from the issue towards repayment or prepayment of the entire or certain debt of the company worth Rs. 375.8 crore
- The proceedings are also planned to be used for general corporate purposes.
Company Financials and Positions
- Devyani International is the largest single Quick Service Restaurant (QSR) listed on Swiggy in India and it was one of the largest single Quick Service Restaurants company in India on Zomato in the year 2019 and 2020.
- Between March 2019-2021, the company saw its core brand stores grow from 469 stores to Rs. 605 crores, a Compound annual growth rate (CAGR) growth percentage of 13.58%
- The operations from KFC and Pizza Hut stores together comprised a revenue earning of 77.49% in the 2020 fiscal pandemic year, a 1.41% increase from 2019. The revenue from these operations reached a new height of 92.28% in the fiscal year 2021.
- In both India and Internationally, the core brands accounted for 94.19% of revenue in the fiscal year 2021. Out of this, 70.20% is said to be earned due to delivery sales, a jump of approx 19% from the fiscal year 2020 (51.15%).
- While the company saw a 25% fall in revenue in the fiscal year 2021, it also saw the loss narrow down to Rs. 63 crores in the fiscal year 2021 from Rs. 121.4 crores in the previous fiscal year.
- In the last six months, despite Covid-19, the company opened 109 stores across its core brand business.
- KFC and Pizza Hut were amongst the early birds to get into contactless delivery beginning in May 2020 and June 2020 respectively.
Other Key Takeaways
- The company credits its 9356 employees for its success and growth effort.
- Kotak Investment Banking, CLSA India Pvt. Ltd., Edelweiss Financial Services Ltd., and Motilal Oswal Investment Advisors Ltd are merchant bankers who are appointed for advising the company on the IPO.
- The firm is led by Promoter, RJ Corp and Virag Joshi, President & CEO, and Ravi Kant Jaipuria. Its management team includes Wholetime Director and Chief Financial Officer Manish Dawar, KFC CEO Rajat Luthra, and Pizza Hut CEO Amitabh Negi.
- The company is extended outside India, to countries like Nepal and Nigeria. Devyani International Company runs a total of 692 stores across 26 states and 2 union territories in India.
If you are interested in investing in the KFC IPO and Pizza Hut IPO as a public investor, the first step is to open a Demat account for your securities and a trading account that will enable you to trade online. Ensure that you choose a reliable financial partner to open your Demat and trading account with so that you safely invest in IPOs of your choice.