Sapphire Foods IPO subscribed 49% on Day 1, retail portion booked 2.56 times

It also operates 209 KFC outlets in India and the Maldives and two Taco Bell restaurants in Sri Lanka.

The initial public offering (IPO) of Sapphire Foods, the operator of KFC and Pizza Hut outlets, was subscribed 49% on the first day of bidding. Investors bid for 47,11,212 equity shares against the offer of 96,63,468 equity shares.

The retail portion was subscribed 2.56 times on Day 1 as individual investors bid for 44,99,340 equity shares against the offered 17,57,994. However, the demand from qualified institutional investors (QIBs) and non-institutional investors (NIIs) remained muted, receiving subscriptions for only 2% and 5% of the portion set aside, respectively.

The company is looking to raise ₹2,073 crore via the initial share sale at an upper price band of ₹1,180/ share. However, it will not receive any proceeds of the issue as the offer is a complete offer for sale (OFS) by promoters and existing shareholders.

Sapphire Foods is one of Yum brand’s restaurant operators in the Indian subcontinent. As of June, the company operates 239 Pizza Hut outlets in India, Sri Lanka, and the Maldives. It also operates 209 KFC outlets in India and the Maldives and two Taco Bell restaurants in Sri Lanka.

Nirmal Bang Securities has assigned a ‘subscribe’ rating to the public offer. “Considering the globally known brand portfolio, growing stores, improving profitability, we have a positive view on the company. At upper band of Rs 1180, the EV/Sales come to 7.4x FY21 Sales,” the brokerage firm said in a note.