Pizza Hut, KFC and Costa Coffee operator Devyani International to raise around 1,400 crore yen with IPO
- Devyani International, Yum Brands’ largest franchisee in India, has received regulatory approval for the IPO.
- The company is looking to raise an estimated 1,400 crore.
- It operates 692 stores in 26 states and 155 cities in India, as well as internationally in Nepal and Nigeria.
Devyani International, Yum Brands’ largest franchisee in India, which operates fast food (QSR) brands such as Pizza Hut and KFC, in addition to its own brands, has received regulatory approval to issue an initial public offering (IPO).
The company is looking to raise ₹ 1,400 crore through the IPO, according to market sources. However, in the draft red herring prospectus (DRHP) filed on May 14, the company said it planned to raise 400 crore.
It operates 692 stores in 26 states and 155 cities in India, as well as internationally in Nepal and Nigeria. The business of the company is broadly classified into three verticals which include the stores of KFC, Pizza Hut and Costa Coffee operated in India.
However, revenues for Pizza Hut and Costa Coffee have declined over the past three years.
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In addition, it operates stores of certain other brands including Vaango, Food Street, Masala Twist, Amreli, and Ckrussh Juice Bar. The company derives 5.28% of turnover from these other operations, for fiscal year 21.
The company believes that the QSR channel is expected to experience a significant rebound in the future due to the rapid urbanization and proliferation of the internet and the lack of time for meals due to busier lifestyles which have played a role. key role in growing popularity of western fast food in India.
The Quick Service Restaurant is a dining establishment primarily focused on providing meals or non-alcoholic beverages, with limited or no table service.
In 2020 in particular, home deliveries drove the revenues of these players, amid the pandemic. However, the much lower traffic to their sites caused them to close several of their outlets. Domino’s Pizza closed 100 of its outlets in the third quarter of 2020, the company’s DRHP record showed.
The company plans to repay its loans with 357 crore from the net proceeds of the IPO.
Additionally, the pandemic has accelerated the growth of online food orders through food delivery apps as consumers have turned to online platforms to avoid spreading or becoming infected with the coronavirus in places. public.
In addition to the pandemic, the growing internet and mobile penetration in India and the advent of food delivery apps are also key factors pulling consumers away from traditional dining experiences and towards convenience-oriented options, according to the DRHP.
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