KFC, Pizza Hut operator Sapphire Foods IPO opens Nov 9, no fresh issue, all OFS; check price band, lot size

Sapphire Foods’ initial public offering is entirely offer-for-sale (OFS) of 1.75 crore equity shares by promoters and existing shareholders. Image: Reuters

KFC, Pizza Hut outlets operator Sapphire Foods’ Rs 2,073-crore IPO will open on Tuesday, 9 November 2021. Sapphire Foods’ initial public offering is entirely offer-for-sale (OFS) of 1.75 crore equity shares by promoters and existing shareholders. The company has fixed a price band of Rs 1,120-1,180 per equity share of face value of Rs 10 each. As a part of the OFS, QSR Management Trust will sell 8.50 lakh shares, Sapphire Foods Mauritius Ltd will offload 55.69 lakh shares, WWD Ruby Ltd will divest 48.46 lakh shares and Amethyst will offer 39.62 lakh shares. In addition, AAJV Investment Trust will sell 80,169 shares, Edelweiss Crossover Opportunities Fund will offload 16.15 lakh shares and Edelweiss Crossover Opportunities Fund-Series II will divest 6.46 lakh shares.

Investors can make bids for a minimum of 12 equity shares and in multiples thereafter, translating to a minimum investment of Rs 14,160 per lot at an upper end of the price band. Up to 75 per cent of the net issue has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional buyers and the remaining 10 per cent for retail investors. Sapphire Foods, an omni-channel restaurant operator and the largest franchisee of Yum Brands in the Indian subcontinent, is backed by marquee investors such as Samara Capital, Goldman Sachs, CX Partners and Edelweiss. It may be noted that Devyani International, which is the other franchisee of Yum! Brands in India, operates 297 Pizza Hut stores and 264 KFC stores. It launched its Rs 1,838-crore IPO in August this year.

The company said investors will be required to ensure that the bank account used for bidding is linked to their permanent account number (PAN). The weighted average return in net worth for the last three fiscals is 24.92 per cent. While the weighted average basic and diluted EPS for the previous three fiscals is Rs 22.46. JM Financial, BofA Securities, ICICI Securities and IIFL Securities are the lead managers to the company’s public issue. The equity shares of the company will be listed on BSE and NSE. As of 30 June 2021, the company had 7,020 permanent employees and 36 consultants and contractual employees, a majority of whom work under the finance function. Sapphire Foods’ association with Yum started in 2015 and they presently have the non-exclusive rights to operate restaurants under three of YUM’s brands, namely, the KFC, Pizza Hut and Taco Bell brands.