Devyani International IPO is getting launched for subscription on Wednesday 04, August 2021, and will be available for subscription till Friday, 04 August, 2021.
The company is looking to raise Rs.1838 crore through public issue which includes fresh issuance of shares worth Rs.440 crore and offer-for-sale (OFS) of shares worth Rs 1398 crore by existing shareholders Dunearn and RJ Corp.
The company is seeking a market valuation of Rs 10,823 crore at the upper end of its price band.
The equity shares of Devyani International Limited are proposed to be listed on both BSE and NSE.
The Devyani International IPO issue will be sold in the price band of Rs 86-90 0per share and the minimum lot quantity is 165 shares and in multiples thereof translating to a minimum investment of Rs 14,850 at upper end.
The latest Grey market premium price (GMP) for Devyani International IPO were seen up by more than 72.39% and were trading around Rs.61-65 as of today, This means people are expecting it to open on listing day to be at least at Rs.130-145 or more.
Having said that GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot.
Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
One must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may have watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?.
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Devyani International IPO let us talk about in brief about the company and its financials and other details step by step.
About Devyani International Limited (DIL):
Devyani International (DIL) is among the earliest and largest operators of quick service restaurants (QSRs) in India. The company is the largest franchisee of Yum brands in India and operates brands KFC & Pizza Hut under its banner.
The company also operates with its own brands (Vaango, Food Street, Masala Twist, Ile Bar, Amreli & Ckrussh Juice) in the country. Apart from India, the company also has exclusive rights for operating KFC & Pizza Hut stores in Nepal and Nigeria.
DIL was incorporated in 1991 and partnered with YUM brand of the US in 1997 to first bring Pizza Hut to India. Later, it introduced KFC as well. The company also got franchise rights for operating the Costa Coffee brand in India.
DIL operates around 696 stores across 166 cities including 284 KFC stores, 317 Pizza Hut stores and 44 Costa Coffee outlets as of June 2021. DIL is the largest franchisee amongst the three for YUM brands in India, the other two being Sapphire Foods & Burman Hospitality.
However, the operating rights are defined exclusive to their respective states and territories for each partner. Globally, YUM Brands Inc. has a very well recognised presence with brands like KFC, Pizza Hut & Taco Bell with more than 50,000 restaurants in over 150 countries as of December 31, 2021.
Costa Coffee in India. Core brands (KFC, Pizza Hut and Costa Coffee) contribute 94% to its topline while the rest comes from international operations and other business (own brand such as Vaango & Food Street).
The core brands store counts grew at a CAGR of 14% in the last two years to 605 stores by March 2021. The store count reached 645 by June 2021 as DIL continued its focus on adding core brand stores amid pandemic.
The company is looking to expand its core brands in existing and new cities as the QSR industry is likely to grow at 12% CAGR over the next five years (higher than historical CAGR of 5.5%), supported by rising urbanisation and per capita income.
Devyani International Limited Financials:
DIL is the largest franchisee of KFC in India, contributing 57% to its overall topline. The segment has recorded strong revenue CAGR of 18% in FY19- 21 to 644 crore, despite covid pandemic led disruption.
The segment’s gross profit also increased at a CAGR of 19% and recorded one of its best gross profit margin (of 68%) in FY21.
Having said that, the company has been reporting losses in the last three years and had negative equity in FY19 and FY20. However, the current and three-year average return on capital stood at 3% and 16.4%, respectively.
Since the company is loss-making, P/E ratio is not applicable, the stock’s P/B ratio stood at 4.3, which is less than its peers’ median level of 18.1.
Priced at 7x price/sales (post issue) FY20 on upper band, DIL would be able to capture the growth owing to metro lifestyle and outside food habits.
This, coupled with the company’s cost rationalisation initiatives will help drive profitability in future for sure. One may subscribe it for long term gains.
Devyani International Peers Comparison:
The company competes with listed peers such as Jubilant Foodworks Ltd., which operates Dominos Pizza stores in India; Westlife Development Ltd., that operates McDonald’s outlets; and Burger King India Ltd.
Peer Comparison |
Total Income (Rs crore) |
PAT (Rs crore) |
EBITDA Margin (%) |
PE (x) |
RONW (%) |
Devyani International |
1198.9 |
−55.2 |
226.9 |
na |
−48.5 |
Jubilant Foodworks |
3384.9 |
230.5 |
771.1 |
214 |
16.2 |
Westlife Development |
1030.3 |
−93.2 |
73.9 |
na |
−20.7 |
Burger King India |
522.9 |
−173.8 |
15 |
na |
−25.4 |
In terms of valuations, the post-issue FY2021 EV/Sales works out – 9.9x to (at the upper end of the issue price band), which is low compared to peers (Jubilant Foodworks-15.4x, Burger King India -14.8x, Westlife Development – 10x).
Further, Devyani International has a better operating margin compared to Westlife Development & Burger king.
If we talk about current market cap of peers listed, Jubilant foods Mcap is 49,820.3 cr, followed by 8,719.9 cr by Westlife, 6,936 cr burger king and post issue Devyani will be second in list with 10,823 cr.
Devyani International IPO Details:
Devyani International limited will sell shares at Rs 86-90 per share in its 3 day initial public offering starting on August 4 to 6, 2021.
The shares of Devyani International IPO will be allotted on 11 August, 2021, The tentative date of Devyani International IPO listing is around 17 August, 2021.
Devyani International Objects of the Offer:
The company proposes to utilise the issue’s proceeds to repay or make advance payments for long-term borrowings to the extent of Rs 324 crore. Outstanding borrowings as on June 30 stood at Rs 541.58 crore.
Frequently Asked Question (FAQ):
1.What Is The Symbol For Devyani International Limited ?
Ans: The Symbol is Devyani
2.When Devyani International IPO Coming?
Ans: The Issue Period for Devyani International IPO is 4-Aug-2021 to 6-Aug-2021.
3. Post Modification Period For Devyani International IPO?
Ans: The Post issue Modification Period for IPO is 9-Aug-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Devyani International IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 9-Aug-2021 (upto 12:00 PM).
5. What Is The Issue Type For Devyani International IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Devyani International IPO?
Ans: The Price (Band) Range for Devyani International is Rs.86 to Rs.90 per equity share.
7. What Is The Lot Size For Devyani International IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Devyani International IPO is of 165 Equity Shares and in multiples thereof 165 Equity Shares.
8. Who Are The Book Running Lead Managers For Devyani International IPO?
Ans: The Book Running Lead Managers are, Kotak Mahindra Capital Company Limited, CLSA India Private Limited and Edelweiss Financial Services Limited
9. What Is The Face Value For Devyani International IPO?
Ans: The Face Value is of Rs.1 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Devyani International IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Name of the Registrar is Link Intime India Private Limited
The Contact person name number and Email id is Shanti Gopalkrishnan,+91 22 4918 6200, devyani.ipo@linkintime.co.in
The Address of the Registrar is C-101, 1st Floor 247 Park Lal Bhadur Shastri Marg Vikhroli (West) Mumbai 400 083 Maharashtra, India
Where To Check Devyani International IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
NSE
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
https://www.nseindia.com/products/dynaContent/equities/ipos/ipo_login.jsp
BSE
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
https://www.bseindia.com/investors/appli_check.aspx
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Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
Conclusion:
The Indian QSR industry has grown at a CAGR of 3% in the last five years to US$40 billion (bn) in 2020. Further, it is likely to grow at a higher rate of 10% to become US$65 bn industry by 2025.
Rapid growth in QSR will be aided by increased urbanisation supported by a younger population with rising income levels and excess disposable income.
Also, QSR is expected to experience a rise in number of transactions and average transaction amount due to the short service time at an affordable price offered by QSR
Let us checkout some of the strengths and risk factors for Devyani International Ltd
Some of the qualitative factors and strengths of Devyani International
- Biggest franchise of KFC in India
- Focus on delivery channels for core brands
- Addition of small size store to improve profitability
- Improvement in unit-level performance
- Several unorganised smaller joints close down
Some of the Risk Factor for Devyani International
- Localised lockdowns, low consumer confidence
- Not exclusive India franchisee & termination of franchisee
- Competition risk
- Negative advertisement of junk food
Therefore, it is always advisable to go through Devyani International IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable.
Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information.
All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.
