KFC, Pizza Hut operator Sapphire Foods IPO: 10 things to know before subscribing

Sapphire Foods India, a franchise operator of KFC and Pizza Hut restaurants, will open its initial public offering for subscription on November 9. The public offer of over 17.5 million shares is entirely an offer for sale (OFS) by the promoters and investors.

The company will not receive any money from this issue as all the funds, excluding issue expenses, will go to the shareholders selling their stakes.

Here are 10 key things to know about the issue, company:

1) IPO dates

The offer opens on November 9 and closes on November 11.

2) Offer details

The offer is valued at Rs 2,073 crore at the upper price band. The selling shareholders are promoters QSR Management Trust and Sapphire Foods Mauritius and investors WWD Ruby, Amethyst, AAJV Investment Trust, Edelweiss Crossover Opportunities Fund.

3) Price band

Sapphire Foods India has fixed a price band of Rs 1,120-1,180 per share.

4) Lot size and reserved portions

Investors can bid for a minimum of 12 equity shares and in multiples of 12 shares thereafter. Retail investors can invest a minimum of Rs 14,160 and their maximum investment would be Rs 1,98,240 for 14 lots as they are allowed to invest up to Rs 2 lakh in the IPO.

The company said up to 75 percent of the shares are reserved for qualified institutional buyers, 15 percent for non-institutional buyers and the remaining 10 percent for retail investors.

5) Book running lead managers

JM Financial, BofA Securities, ICICI Securities and IIFL Securities are the lead managers to the public issue. The company’s shares will be listed on the BSE and the National Stock Exchange.

6) Registrar

Link Intime India Private Ltd. is the registrar to the offer.

7) Company profile

Sapphire Foods is the largest franchisee operator of Yum! Brands in the Indian subcontinent. It is backed by marquee investors including Samara Capital, Goldman Sachs, CX Partners and Edelweiss.

8) Businesses

Sapphire Foods owned and operated 209 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka as of June 30, 2021.

9) Financials

Sapphire Foods narrowed its loss to Rs 99.9 crore in FY21 from a loss of Rs 159.25 crore in the previous year. Revenue from operations during the period dropped to Rs 1,019.62 crore in FY21 from Rs 1,340.41 crore in FY20 due to the Covid-19 crisis.

10) Shareholdings

Currently among the promoters, Sapphire Foods Mauritius holds 45.52 percent stake in the company while QSR Management Trust has 5.83 percent. WWD Ruby holds 18.38 percent, Amethyst 6.53 percent, AAJV Investment Trust 0.13 percent and Edelweiss Crossover Opportunities Fund 6.69 percent.