Devyani International sets its IPO price band at Rs 86-90

The public issue is set to commence on August 04, constituting a fresh issue of Rs 440 crore along with an offer for sale of 15,53,33,330 equity shares by Dunearn Investments (Mauritius) Pte Ltd and promoter RJ Corp. The entire fundraising stood to be Rs 1,838 crore at a higher price band. 

The largest franchisee of Yum Brands Devyani International, which is also considered as the largest operator of chain quick-service restaurants in India, has set its price band at Rs 86- 90 per equity share for its initial public offering, according to the information stated in the daily newspaper on July 30.

The public issue is set to commence on August 04, constituting a fresh issue of Rs 440 crore along with an offer for sale of 15,53,33,330 equity shares by Dunearn Investments (Mauritius) Pte Ltd and promoter RJ Corp. The entire fundraising stood to be Rs 1,838 crore at a higher price band.

As per reports, Dunearn will offload nearly 6,53,33,330 equity shares, while RJ Corp will sell 9 crore equity shares through an offer for sale. The company has set aside nearly 5.5 lakh equity shares of its IPO for the employees.

The offer is scheduled to end by August 6. The Anchor book will be open for a day on August 3, prior to a day before the IPO opening.

Investors can avail for bid for a minimum of 165 equity shares and in multiples of 165 equity shares further. Nearly 75 per cent of the total offer is kept for qualified institutional buyers while 10 per cent and 15 per cent are kept for retail investors and non-institutional investors respectively.

Reportedly, the operators of KFC, Pizza Hut, and Costa Coffee chain will utilize net proceeds from its fresh issue to repay debts while the offer for sale money will move to the selling shareholders.

Investors are quite excited about the Devyani International IPO following the success witnessed in the listing of Zomato, Burger King India, and Barbeque Nation Hospitality.

Devyani International’s relationship with Yum began in the year 1997 when it initiated its first Pizza Hut store in Jaipur, and eventually, it continued to expand its operation with KFC and Pizza Hut franchises. As of June 2021, it operated nearly 284 KFC stores and 317 Pizza Hut stores across the country.

Moreover, it is a franchise of the Costa Coffee brand in India, owned by Costa and operated by 44 Costa Coffee stores. In the COVID 19 pandemic too the company stretched its store networks and by the end of March 2021, it initiated 109 stores in Core Brands Business (KFC, Pizza Hut, and Costa Coffee).

Reportedly, Yum! Brand Inc runs brands namely KFC, Pizza Hut, and Taco Bell brands. As of December 2020, it marks its presence globally with over 50,000 restaurants in more than 150 countries.

Devyani International minimized its loss in FY21 to Rs 62.98 crore from Rs 121.42 crore in FY20. The company’s revenue in the same period fell to Rs 1,134.84 crore from Rs 1,516.4 crore.

As yet, the promoters of the company are Ravi Kant Jaipuria, Varun Jaipuria, and RJ Corp with around 75.79 per cent shareholding. Dunearn posses 14.07 per cent shareholding in the company among other public shareholders.

The book running lead managers of the issue are namely, Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services, and Motilal Oswal investments.

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