KFC, Pizza Hut operator Devyani International receives Sebi nod for IPO

Mumbai: Devyani International, the largest franchisee of Yum Brands in India, has received market regulator Sebi's nod for its proposed initial public offer (IPO).

The IPO would comprise of a fresh issue of Rs 400 crore and an offer for sale of up to 12,53,33,330 shares by a wholly-owned subsidiary of Temasek Holdings (Dunearn Investments Mauritius Pte) and RJ Corp. As per sources, the IPO size would be about Rs 1,400 crore.

Devyani International, which operates core brands such as Pizza Hut, KFC, Costa Coffee besides its own brands such as Vango and Food Street, had filed its draft papers with Sebi on May 19.

The QSR company has 692 stores in 26 states across 155 cities in India, Nepal and Nigeria.

Devyani opened its first Pizza Hut store in Jaipur in arrangement with Yum. It operated 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee stores as on March 31, 2021 in India. Between March 2019 and March 2021, the core brand stores saw a CAGR growth of 13.58 per cent from 469 stores to 605 stores and the company attributes its success and continuous growth effort to its 9,356 employees.

Devyani is the single largest QSR company in India to be listed on Swiggy and was amongst the largest QSR companies in India to be listed on the Zomato platform in 2019 and 2020.

As per some estimates, the QSR industry is seen growing at a compounded annual growth rate of 12.4 per cent over 2020-2025. In FY21, Devyani’s business from the core brands (India & internationally) accounted for 94.19 per cent of its revenues from operations and delivery sales represented 70.20 per cent of the said revenues, an increase from 51.15 per cent in FY20.

A company press release claims that Devyani opened 109 stores across its core brand business in the last six months. KFC and Pizza Hut were amongst the earliest to roll out contactless delivery in May 2020 and June 2020, respectively.

Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and Motilal Oswal Investment Advisors are investment bankers appointed to the issue.