Sapphire Foods IPO: The IPO of Sapphire Foods, the company that runs KFC and Pizza Hut restaurants in the country, has opened for subscription today. This IPO of Rs 2073 crore will be open for subscription till the next days i.e. November 11. No new shares will be issued under this IPO i.e. it is completely Offer for Sale (OFS). Due to rapid urbanization and increasing number of working population in the country, the trend of fast food is increasing. In such a situation, the growth of the business of Sapphire Foods is looking good to the market analysts. According to analysts, investors can invest in it for long term purpose.
Advice given to investors to invest money for long term
According to Reliance Securities, the IPO is valued at 60.2x FY21 EV/EVBITDA and 7.3x EV/Sales. The issue is at a discount to the recently listed Devyani International and has better margins than Devyani International. According to analysts, the growing number of working people and the expansion of cities is expected to increase the culture of fast food. Reliance Securities has advised investors to invest in this IPO for long term.
Sapphire Foods IPO Details
- The IPO of Sapphire Foods will be open for subscription till November 11. No new shares will be issued under this IPO i.e. it is completely Offer for Sale (OFS).
- Under the IPO of 2073 crore, a price band of Rs 1120-1180 per share has been fixed for shares with a face value of Rs 10.
- The company has fixed the lot size of 12 shares i.e. according to the upper price of the price band, investors will have to invest at least Rs 14160.
- The allotment of its shares can be finalized on November 16 and the listing can be done on November 22.
- Link Intime India has been appointed as the Registrar for the issue.
Details about the company
- Sapphire Foods is an omni-channel restaurant operator as well as the largest franchise company of Yum Brands in the Indian sub-continent. It runs restaurants of brands like KFC, Pizza Hut and Taco Bell in the country.
- As of March 31, 2021, it has 204 KFC restaurants in India and Maldives as per the available data. It has 231 Pizza Huts in India, Sri Lanka and Maldives. It has two Taco Bell restaurants in Sri Lanka. It is the largest international QSR (Quiss Service Restaurant) chain in Sri Lanka.
The number of Sapphire Foods restaurants in the Indian subcontinent increased from 376 in 2019 to 437 in 2021. - Talking about the financials of the company, in the last financial year 2021, the effect of corona epidemic was visible on its business and only Rs 1020 crore was received in revenue. The company had a revenue of Rs 1190 crore in the financial year 2019 and Rs 1340 crore in the financial year 2020. Talking about the net profit (Profit After Tax) of the company, in the financial year 2021, it had a loss of Rs 100 crore.
Devyani International IPO investors get 67% profit
Before Sapphire Foods, another major operator company of KFC and Pizza Hut in India, Devyani International has brought its IPO of Rs 1838 crore in August itself. Its IPO was subscribed 116.71 times. Devyani International had a tremendous entry in the market. The trading of its shares started at a price of Rs 141 against the IPO price of Rs 90 on the stock exchange i.e. at a premium of 56.67 percent. It closed on November 8 at a price of Rs 160.65, that is, since the listing, the money of IPO investors has increased by about 67 percent.
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