Sapphire Foods sees muted debut, ends day with 3% gains over issue price

The firm's IPO had garnered nearly 7x subscription. Sapphire Foods is the largest YUM franchisee operator and runs KFC, Pizza Hut and Taco Bell restaurant chain

Sapphire Foods India, company that operates KFC, Pizza Hut and Taco Bell restaurant chain, had a muted stock market debut on Thursday. Its shares ended at Rs 1,216, a gain of just 3 per cent, or Rs 36 over its issue price of Rs 1,180. The stock hit a high of Rs 1,383.6 and a low of Rs 1,160 on the BSE.

The company’s IPO had garnered nearly 7 times subscription. Sapphire Foods is the largest YUM franchisee operator. The company has non-exclusive rights to operate restaurants under three of YUM’s leading brands.

Sapphire Foods’ IPO was entirely an offer for sale worth Rs 2,073 crore. At the last close, the company was valued at nearly Rs 7,727 crore.

For the 12-month period ending June 2021, Sapphire Foods had reported operating profit of Rs 182 crore.

The company has an EV/EBITDA of 41 times, slightly below its peers. Jubilant Foodworks and Westlife Development trade at around 50 times and 74 times EV/EBITDA, as per analyst.

At the end of June 2021 quarter, the company operated 450 stores. Westlife operates about 305 stores, Burger King 270 and Jubilant close to 1,400.