On Thursday, Devyani International Limited’s initial public offering (IPO) reached the end of its second day of subscriptions. The KFC and Pizza Hut franchisee saw a 6.73-fold oversubscription to its first public offering. According to subscription statistics on the markets, the company received bids for 78.78 crore equity shares against an offering size of 11.25 crore shares. The IPO size was cut from 20.42 crore equity shares to 11.25 crore equity shares in the first half of the day after the business raised a whopping Rs 824.87 crore from anchor investors prior to the issue making its market debut.
The retail investor category accounted for the most subscriptions out of all the other categories in terms of investor subscriptions. The offer has been subscribed to a total of 23.16 times by retail investors against their assigned amounts. Non-institutional investors (NIIs) were then subscribed at a rate of 6.68 times their allocation. The qualified institutional buyers (QIBs) subscribed at a rate of 1.32 times their reserved part.
Employee subscriptions accounted for a chunk of the overall subscription figures, as they subscribed 3.12 times their allotment to the Devyani International IPO. In terms of reserve, the QIBs were assigned a 75% reservation. A reserved portion of 15% and 10% was granted to NIIs and retail investors, respectively. On August 6, Devyani International’s grey market premium (GMP) was Rs 65. This is a Rs 5 rise over the GMP of the previous day. On the unlisted market, the shares were trading at a premium of Rs 151 to Rs 155 per equity share, indicating that they were trading at a premium of Rs 151 to Rs 155 per equity share.
“DIL is the largest franchisee of KFC in India, providing 57 percent to its entire topline,” ICICI Direct wrote in a note about the company’s finances leading up to the IPO. Despite pandemic-related disruption, the segment had a good revenue CAGR of 18% in FY19-21, reaching | 644 crore. The segment’s gross profit grew at a 19% compound annual growth rate (CAGR) and had one of its greatest gross profit margins (68%) in FY21. On the cost front, while Yum Inc manages all of KFC’s marketing expenses, DIL pays a fixed royalty of 6% of its gross income.”
Devyani International is one of the country’s leading quick-service restaurant (QSR) chains, with a substantial presence both in India and internationally. The company’s revenue is generated through three main verticals. The fundamental brands, KFC and Pizza Hut, are the first and most important. The brand’s international business is the second vertical, and the various businesses that fall under the brand’s umbrella are the third. Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar are among the other companies.