KFC and Pizza Hut operator Devyani International shares witnessed strong demand in the grey market as the trading premium increased to 56 percent from 17 percent during the last week, ahead of IPO opening.
The Rs 1,838-crore initial public offering will open for subscription on August 4 and will close on August 6, comprising a fresh issue of Rs 440 crore, and an offer for sale of Rs 1,398 crore by existing selling shareholders - Dunearn Investments and RJ Corp.
The company will utilise net proceeds from fresh issue for repaying of debts.
Devyani International shares traded at a premium of Rs 40-50 in the grey market, the IPO Watch and IPO Central showed.
The trading price comes to Rs 130-140 in the grey market, which is higher by 44.4-55.6 percent over higher issue price band of Rs 90. The premium was 17-22 percent before the official announcement of price band.
Other reason for increase in grey market premium could be the recent healthy listings of Zomato, Tatva Chintan Pharma, Clean Science, GR Infraprojects etc.
"Looking at fundamentals as well as flavour of street at first glance, retail investors can bet on QSR story Devyani International for listing gain as well as long term wealth building stories on the back of high demand and low supply," said Prashanth Tapse, VP Research at Mehta Equities.
Devyani International is the largest franchisee of Yum Brands in India and is among the largest operators of chain quick service restaurants (QSR) in India, on a non-exclusive basis, and operate 696 stores across 166 cities in India, as of June 2021.
Yum! Brands Inc. operates brands such as KFC (a global chicken restaurant brand), Pizza Hut (the largest restaurant chain in the world specializing in the sale of ready-to-eat pizza products) and Taco Bell brands and has presence globally with more than 50,000 restaurants in over 150 countries, as of December 31, 2020.
In addition, it is a franchisee of the Costa Coffee brand (a global coffee shop chain with over 3,400 coffee shops in 31 countries) in India, which is owned by Costa, and operated 44 Costa Coffee stores as of June 2021.
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