KFC, Pizza Hut brand operator eyes Rs 10,823 cr valuation in IPO

Ravi Kant Jaipuria-promoted Devyani International prices its IPO between Rs 86-90

Devyani International, the KFC franchisee, Pizza Hut and Costa Coffee in India, is eyeing valuations of close to Rs 11,000 crore in its initial public offering (IPO), which hits the market next week.

The Ravi Kant Jaipuria-promoted firm has set a price band of Rs 86-90 per share.  Its IPO opens on Wednesday and closes on Friday (August 6).

Devyani will issue fresh equity shares worth of Rs 440 crore in the IPO. The proceeds will be used to retire debt, which is around Rs 500 crore on consolidated basis.

The IPO also see Ravi Kant Jaipuria, Dunearn and RJ Corp offload some of their holdings. The total offer for sale component of the IPO is nearly Rs 1,400 crore. The promoter holding will decline from 75.8 per cent at present to 68 per cent post the IPO.

Devyani is the largest Yum Brands franchisee in India. It is among the largest operators of chain quick-service restaurants (QSR) on a non-exclusive basis.

It operates 696 stores across 166 cities in India as of June 30, 2021. Yum Brands operates brands such as KFC, Pizza Hut and Taco Bell.  The company is also a franchisee for the Costa Coffee brand and stores in India. The company also operates KFC and Pizza Hut stores in Nepal and Nigeria. The company began its association with Yum in 1997, when they commenced operations of  Pizza Hut store in Jaipur. And subsequently continued to expand its operations with both KFC and Pizza Hut franchises.

Devyani has reported net loss in the previous three financial years. For the year ended March 2021, Devyani reported net loss of Rs 63 crore, down from Rs 121 crore in the preceding year. It had reported revenues of Rs 1,135 crore in FY21, down 25 per cent year on year.

Kotak Mahindra Capital, CLSA India, and Edelweiss Financial Services are the global coordinators and book running lead managers to the offer. Motilal Oswal Investment Advisors is the book running lead manager to the offer.