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Devyani International IPO: A Detailed Guide

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  • July 1, 2021
Devyani International Launch Date Price - Devyani International IPO: A Detailed Guide

Devyani International IPO Launch Date & Price

Devyani International Limited IPO details
Issue Period4-Aug-2021 to 6-Aug-2021
Price RangeRs.86 to Rs.90
Bid Lot165 Equity Shares and in multiples thereof
Minimum Order Quantity165 Equity Shares
Maximum Order Quantity2145 Equity Shares
Maximum Subscription Amount for Retail InvestorRs. 2,00,000
IPO Market Timings10.00 a.m. to 5.00 p.m.
Allotment Date11-Aug-2021
IPO Listing Date16-Aug-2021

Devyani International Limited is the largest franchisee of Yum Brands in India. It is also among the largest operators of Quick Service Restaurant (QSR) chains in India. As of March 31, 2021, it has 655 operational stores across 155 cities in India.

With the onset of a pandemic, food tech aggregators like Swiggy and Zomato have seen a boom in their average order values. Consumers have also become more safety conscious, which bodes well for franchise operators like Jubilant Foodworks (Domino’s) and Devyani. So the timing is ripe for these companies to raise money and accelerate growth.

With this backdrop, here’s all you need to know about Devyani International Limited’s Rs. 1,400 crores IPO, the launch date, and how to apply for Devyani International IPO.

Devyani International Company Details

A list of brands the company operates and their presence in India (percentage of brand contribution to total revenue for FY 21 is in brackets, as per DRHP):

  • KFC (67.65%): Kentucky Fried Chicken is a Quick Service Restaurant (QSR). Devyani is the largest KFC franchise partner in the country, with more than 250 stores as of Mar’21.
  • Pizza Hut (30.19%): There are only two franchise partners for Pizza Hut in India, and they manage 350 stores cumulatively. Pizza Hut has been named the ‘Most Trusted Food Service Brand’ for 13 years.
  • Costa Coffee (2.23%): It operates 44 coffee shop outlets (as of March 31, 2021) spread across all formats covering High Street, Shopping Malls, Airports, Hospitals, Corporates & Highways.
  • Like Vaango and The Food Street (negligible), other brands like Vaango serve pure South Indian vegetarian meals in a modern and contemporary ambiance. It has 26 stores across India. Food Street is a food-court model that operates out of malls, airports, etc.

Devyani International – Stores in India and Abroad

Devyani International has a total of 666 stores across India, Nepal, and Nigeria.

Despite the pandemic, the company has established 109 Stores across its key brands in the previous six months. In May 2020 and June 2020, respectively. KFC and Pizza Hut were among the first to provide contactless delivery.

The number of stores in India:

KFC – 264

Pizza Hut – 297

Costa Coffee – 44

Vaango – 26 

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The number of stores in Nepal and Nigeria

KFC – 32

Pizza Hut – 3

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These brands give Devyani a solid portfolio to cater to different user buckets and across various cuisines. They are present across the “key consumption market with a cluster-based approach,” per Devyani’s website.

Financial performance of the company (All amounts in Rs. crores):

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The decline in FY21 is in line with a decrease in other companies’ revenue, mainly due to the ongoing pandemic.

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Cashflows have remained consistent, implying that the company is operationally viable, and at scale, has profit potential. However, the company has struggled to make profits over the years (mainly due to high finance charges/interest costs).

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With increasing consciousness towards branded food, a vibrant delivery ecosystem, and increasing average order values, margins for Devyani International are expected to improve.

Percentage of Total revenue from operations in FY: 20-21

Core Brands Business84.02%
International Business10.17%
Other Businesses5.28%

Core Brands Business – KFC, Pizza Hut, and Costa Coffee stores operated in India

International Business – KFC and Pizza Hut stores operated outside India

Other Businesses – Operations in F&B (Food and Beverages) industry, stores such as Vaango (South Indian food ), and other businesses. 

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QSR’s – Other IPO’s 

Burger King’s stock has increased by more than 141 percent since its first public offering in India in December 2020. Mrs. Bectors, a cookie and cracker manufacturing company’s initial public offering (IPO), was oversubscribed 198 times, and the stock now trades at a 48 percent premium to the IPO price.

About the IPO

Devyani will be the third restaurant chain to come up with an IPO after the successful listing of Burger King and Barbeque-Nation Hospitality.

According to the Draft Red Herring Prospectus, the offer comprises a fresh issue of Rs. 400 crore and an Offer of Sale of up to 12.53 crore equity shares.

The pandemic has not been able to put a stopper to the company’s growth engine: they have opened 109 stores across brands in the last nine months. The growing acceptance of online food delivery is also helping these brands have a stronger foothold in Tier 2 and 3 cities.

Devyani International IPO Launch Date

Devyani International IPO launch date or open and close dates are yet to be announced.

Although the Devyani International IPO is expected to come out within FY-22, the exact date for retail and institutional investors to participate in the initial public offering is not confirmed.

Devyani International IPO Price

Devyani International IPO price is yet to be announced. Although, by a back-of-the-envelope calculation, we may arrive at the same. Word on the street is that the IPO size is Rs. 1,400 crores, of which Rs. 400 crores will be a fresh issue. Balance Rs. 1,000 crores are expected to be Offer for Sale (12.53 crores shares). Thus, the issue could be priced in the range of Rs. 70-80.

The Dominance in The Food Industry 

Over the past few years, the QSRs have a significant chunk in the Indian Food Industry. This is because a majority of Indian consumers prefer them. Between now and fiscal year 2025, the quick-service restaurant (QSR) market is anticipated to develop at a compound annual growth rate of 23%.

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How does this benefit Devyani International?

As the market for QSRs is set to develop at 23% CAGR, Devyani International can take advantage of this market opportunity, and it can benefit from its IPO

Devyani International is the single largest QSR firm in India to be listed on Swiggy, and in 2019 and 2020, it was among the top QSR companies in India to be featured on the Zomato platform.

The dominance of QSRs in the industry is favourable to Devyani International. As the preferences and tastes of the consumers are being shifted to fast foods, huge demand and opportunities are coming their way. This is a massive advantage for the company and a good opportunity for the investors to invest in the IPO of Devyani International.

The company can use the raised money from the IPO to clear off the debt of Rs 3,578.30 crores; this makes the company a debt-free company. Once it is debt-free, it can focus on expanding its operations and increase its market share. 

Fast-food chains account for less than 5% of India’s food services sector, while the worldwide average is 20%. This allows Devyani International an opportunity to expand its scale. 

How To Apply For Devyani International IPO with Trade Smart

The easiest way to apply for Devyani International IPO for existing stock-market investors is through their Demat accounts. But, if you have never before participated in primary markets and are wondering how to apply for Devyani International IPO, then head over to TradeSmart online for an easy and smooth IPO application experience.

Register to the TradeSmart platform in a few simple steps and use their ‘Box’ interface to apply for Devyani International IPO. Then, select the “IPO” option from the ‘Portfolio’ menu in your TradeSmart Box account and search for “Devyani International IPO” from the list of current and upcoming IPOs. Every important IPO information such as the open and close date, minimum order quantity, price range, and issue size will be visible next to the IPO name.

Once you have located the Devyani International IPO in the list, click on the ‘Bid’ button next to participate in the IPO offer. TradeSmart allows you to bid for an IPO and pay through your UPI ID. So, all you have to do to bid for the Devyani International IPO successfully is to enter your UPI ID registered to your bank account.

Then you can easily apply for Devyani International IPO by submitting your bid at the cut-off price or any other price that matches your investment budget. However, you can only place your bid for share quantity per the permissible lot size, also indicated on the portal.

After finalising the quantity and price for one or multiple bids, you can confirm that you have read the RHP (Red Herring Prospectus or IPO Draft Prospectus) and accept the UPI mandate on your UPI app to block the IPO application amount.

This will confirm your application for Devyani International IPO, and you would have participated in the food-sector growth engine that Devyani is.

FAQ

What are the open and close dates of the Devyani IPO?
The Initial Public Offering of Devyani Limited will open for Subscription on August 4, 2021 (Wednesday) and will close on August 6, 2021 (Friday).

What is the price range for applying for the Devyani IPO?
The offer price for Devyani IPO has been fixed at Rs 86 to Rs 90.

What is the lot size and minimum order quantity of the Devyani IPO?
Investors can subscribe to the IPO by applying for a lot of 165 shares or in multiples thereof.

For the Devyani IPO what is the Maximum Subscription Amount for Retail Investors?
The amount is Rs 2 lakhs.,i.e a maximum of 13 lots at the upper end of the price band.

What is the allotment date for the Devyani IPO?
The shares will be allotted around August 11, 2021

Who is the registrar of Devyani IPO?
The registrar is Link Intime India Private Limited.

When will the shares of Devyani be listed on the exchanges?
The shares of the company will be listed on August 16, 2021 on both NSE & BSE

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