How can you be a part-owner of KFC & Pizza Hut? Devyani International IPO
Hello doston, Angel broking ke ek aur podcast main aapka swagat hai.
Doston, aaj hum baat karenge burgers, pizza aur coffee ki. Nai, nai doston! Aapne kisi food ya cooking podcast pe click nahi kiya, aap Angel broking ka podcast hi sunn rahe hai.
Actually, aaj main baat karunga Devyani International ke IPO ki. Devyani International India mein Pizza hut, KFC and Costa Coffee outlets ke 655 outlets operate karta hai and it is the biggest franchisee of US based Yum! Brands.
Pichle kuch mahino mein QSR yaani quick service restaurants ke IPOs kaafi popular hue hai Indian markets main. Iske pehle Burger King aur Barbeque Nation Ke IPOs market main debut kar chuke hai and now it is Devyani International which has approached SEBI to launch an IPO of Rs 1,400 crore.
Ab aapke paas ek unique opportunity hai to become a part-owner of the business that owns Pizza Hut, KFC and Costa Coffee. Exciting toh hai par pehle, let’s get to know more about the company Devyani International.
Question number 1: Why is Devyani International filing the IPO?
Sabse pehle, let’s get the technical details out of the way. Devyani International’s IPO will involve fresh issue of equity shares worth Rs 400 crores and an offer-of-sale of up to 12.5 crore shares.
Yeh jo 12.5 crore shares hai, they will be sold by two companies, basically, Dunearn Investments Mauritius private limited, jo ke ek wholly-owned subsidiary hai Temasek Holdings Private Limited ki. Doosri company ka naam hai RJ Corp limited, jo ki ek promoter company hai.
Alright, so kya plans hai company ke share enlist karne ke baad? Well, Devyani International IPO se milne wale paise ko use karegi towards repayment of company’s borrowing of Rs 357.8 crore. Iss Mein se kuch amount will also be used for general corporate purposes as well.
Ok, so far, so good. Aage badhte hai.
Question number 2: Iss company ka background kya hai?
Devyani International was founded in 1991 and is owned by Indian billionaire Ravi Jaipuria’s RJ group. Ravi Jaipuria ji ka total net worth 3.5 billion dollars hai and he is currently listed as 925th richest person in the world and the 61st richest person in India as per Forbes.
Devyani International company ka naam assal main unki daughter ke naam par rakha gaya hai.
Ek aur interesting fact yeh hai ke RJ Corp- wahi company jo Devyani international ko own karti hai- is also the largest bottler for PepsiCo in India.
Ravi ji ek aur company ke maalik hai- Varun beverages, which is PepsiCo’s second-largest bottler globally.
Question number 3: Devyani International ki history kya rahi hai?
It was in 1997 that Devyani International first tied up with Yum! Brands and opened India’s first Pizza Hut outlet in Jaipur. After that, there has been no looking back. Aaj ke din main the company operates 297 Pizza Huts, 264 KFCs and 44 Costa coffee shops across India. Iske alawa the company also operates other brands like Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrushh Juice Bar.
Devyani International has more than 9,000 employees today.
Question number 4: Devyani International ke financials kya kehte hai?
Devyani International ka major revenue KFC auur Pizza hut stores se aata hai.
Fiscal year 19,20 aur 21 main KFC and Pizza Hut made up for 76%, 77.49% and 92.28%
of Devyani International’s total revenue. However, the company has also suffered major losses in these three years. In Fiscal years 19,20 and 21, the company reported losses of Rs 94 crore, Rs 121.4 crore and Rs 63 crore respectively.
Hmm... losses toh rahe hai company ke. Par yeh losses kyun hai? Is pe company ka kehna hai ke this is because of two reasons. First reason is
high operating costs incurred because of expansion of store network
and the second reason is the failure to recover these costs from operations at these stores.
Ek aur bahut important statement jo company ne apne DRHP main kahan hai woh yeh hai ke- ab yeh dhyaan se suniyega doston…..As for the future, the company states that it plans to open new stores each year and it expects to report losses as long as these stores don’t mature.
Basically, company ka kehna hai ke it plans to open new stores aur ispe usse losses expected hai jab tak stores revenue auur profit generating nahi ban jaate.
IPO ki filing karte waqt har company ko DRHP ya draft red herring prospectus file karna hota hai. Yeh document company main invest karne se pehle investors ko kaunse risk factors pata hone chahiye iski information bhi deta hai.
Devyani International ka DRHP main Covid ke impact ko risk factor bataya gaya hai. The company has declared that it permanently closed down 61 stores under its core brand business in FY21 because of a significant decline in footfalls.
Declining footfalls have also hurt the in-store dining revenue of the company from the core brands jo ke FY20 main total revenue ka 48.85% tha par FY21 main it has fallen to 29.80% of the total revenue. It is not only for in-store dining which recorded an overall fall in revenue. Revenue from operations fell by over 25% to Rs 1,134 cr in FY21 from Rs 1,516 cr in FY20.
Devyani International ne apne DRHP main yeh bhi kahan ke they expect the negative impact of Covid-19 to continue in FY22.
Toh yeh the key facts about the Devyani international IPO. Doston, stock market investments karne se pehle, it is quite important ke aap apna due-diligence aur research khud karein. Friends aur family ke kehne pe ya kahi-suni pe investment karna dangerous hai and you can end up losing a lot of your money. Agar aap Devyani International IPO main invest karne main interested hai toh ek bar Draft red herring prospectus Google kar ke deeply padhiye, fayde main hi rahenge .
And yes, yeh baat yaad rakhiyega ke stock market investing main risk hamesha rahega. This podcast has been made for educational purposes only and the investor must do his own research as well.
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Investments and the securities markets are subject to market risks. Read all the related documents carefully before investing.