About the Company:
Devyani International Ltd is the largest franchisee of Yum Brands in India and are among the largest operators of chain quick service restaurants (“QSR”) in India
Company operates 655 stores across 155 cities in India, as of March 31, 2021.
Yum! Brands Inc. operates brands such as KFC, Pizza Hut and Taco Bell brands and has presence globally with more than 50,000 restaurants in over 150 countries, as of December 31, 20201.
In addition, company is also a franchisee for the Costa Coffee brand and stores in India.
Company’s Business:
- Company’s business is broadly classified into three verticals that includes stores of KFC, Pizza Hut and Costa Coffee operated in India (KFC, Pizza Hut and Costa Coffee referred to as “Core Brands Business”.
- Company operates stores outside India primarily comprising KFC and Pizza Hut stores operated in Nepal and Nigeria (“International Business”).
- Company also has operations in the F&B industry, including stores of our own brands such as Vaango and Food Street (“Other Business”).
Brands Operated by the Company:
KFC India:
Company’s first KFC store in India opened in 2005 at Kolkata. As of March 31, 2021, company operated 264 KFC stores located in 21 states and two union territories, across 97 cities in India.
Company mainly operates two formats of KFC stores, namely, a larger format with full service dining in capacities, and small-store formats to cater to delivery/ take-away orders with limited seating for customers/ riders waiting to pick-up orders.
Number of KFC stores opened in India during the periods indicated:
Financial and operational information on KFC stores in India.
Pizza Hut India:
Company’s first Pizza Hut store in India opened in 1997 at Jaipur. As of March 31, 2021, we operated 297 Pizza Hut stores located in 20 states and three union territories, across 100 cities in India, including in all the major states other than Tamil Nadu.
Company mainly operates two formats of our Pizza Hut stores, namely, a larger format with full service dining-in capacities, and smallstore formats to cater to delivery/ take-away orders with limited seating for customers/ riders waiting to pick-up orders.
Number of Pizza Hut stores opened in India during the periods indicated:
Financial and operational information on Pizza Hut stores in India.
Costa Coffee:
Company’s first Costa Coffee store in India opened in 2005 at Delhi. As of March 31, 2021, we operated 44 Costa Coffee stores located in eight states and one union territory, across 17 cities in India.
Company currently operate two formats of Costa Coffee stores,namely, our full retail stores at high-street locations and malls, and branded kiosks at airports, hospitals and food courts at highways.
Number of Costa Coffee stores opened in India.
Key financial and operational information on our Costa Coffee stores.
International Business:
As of March 31, 2021, company had 35 stores of Core Brands outside India, comprising 32 KFC stores and 3 Pizza Hut stores. In addition, company operated two stores of another brand outside India as of March 31, 2021.
Company operates KFC and Pizza Hut stores in Nepal, and KFC stores in Nigeria, on a non-exclusive sole franchisee basis.
Revenues from International Business:
Other Business:
In addition to Core Brands Business and International Business, company operates stores of other brands such as Vaango, The Food Street, Ile Bar, AMRELI, Ckrussh Juice Bar, among others. Company typically operates these in the form of outlets within larger food courts in malls and airports.
Vaango:
Company launched our own brand ‘Vaango’, a south Indian QSR chain in 2011. The first Vaango outlet in India was opened in 2011, at Noida. As of March 31, 2021, we operated 26 Vaango outlets located in eight states and one union territory, across 15 cities in India.
In Fiscal 2019, 2020 and 2021, company opened 12, 11 and 2 new Vaango outlets in India.
Relationship with Yum Brands:
Company began its relationship with Yum in 1997, when we commenced operations of our first Pizza Hut store in Jaipur.
Company has subsequently continued to expand its operations with both KFC and Pizza Hut franchises, and as of March 31, 2021, operated 264 KFC stores and 297 Pizza Hut stores across India.
In the Core Brands Business, company had an extensive presence in 26 states and three union territories in India as of March 31, 2021.
In addition, company is also a franchisee of the Costa Coffee brand in Indi a, which is owned by Costa, and operated 44 Costa Coffee stores as of March 31, 2021.
Technology/ Trademark License agreement, franchisee fee and Store Opening Fees Details:
Store Opening Fees. For each store that company opens under our Core Brands Business, we are required to pay an initial fee. Under the KFC TLAs and Pizza Hut TLAs for stores opened in 2021, we were required to pay US$ 53,400 (subject to US CPI index) and US$ 26,700 (subject to US CPI index) for each KFC store and Pizza Hut store opened, respectively. Under the Costa IDA, we are required to pay a nominal fee for every Costa Coffee store opened. In addition:
• Under the KFC TLAs, we are required to pay a continuing fee amounting to 6.30% of the revenues of each KFC store as consideration for the right to use the KFC restaurant formats and operating systems.
• Under the PH TLAs, we are required to pay a continuing fee amounting to 6.30% of the revenues of each Pizza Hut store as consideration for the right to use the Pizza Hut restaurant formats and operating systems.
• Under the Costa IDA, we are required to pay a franchisee fee amounting to 6.00% of the sales (excluding GST) of each Costa Coffee store as consideration for the right to sell coffee products and use the Costa brand.
Expansion of Store network:
Company has been consistently expanding store network over the years. Stores in our Core Brands Business grew at a CAGR of 13.58% from 469 stores as of March 31, 2019 to 605 stores as of March 31, 2021.
Despite the ongoing COVID-19 pandemic, company has continued to expand store network and in the six months ended March 31, 2021, company opened 109 stores in Core Brands Business.
Company’s Employees:
As of March 31, 2021, company had an employee base of 9,356 employees, of which 8,833 employees were in India, and 523 were outside India.
As of March 31, 2021, out of 8,833 employees in India, 1,506 employees were engaged on a full-time basis, while 7,327 were engaged on a part-time basis.
Management Team:
- Mr. Ravi Kant Jaipuria (Designation: Non-executive Director)
- Mr. Varun Jaipuria (Designation: Non-executive Director)
Objectives of the Issue:
- Repayment/prepayment of all or certain of our borrowings.
- General corporate purposes.
Positives for the Company:
Portfolio of highly recognized global brands.
- Company operates franchises of several highly recognized global QSR brands and are the largest franchise partner for Yum in India.
- Company is also the non-exclusive sole franchisee for KFC and Pizza Hut in Nepal, and for KFC in Nigeria and are also a franchisee for Costa Coffee in India.
- In addition, company owns and operates stores of certain other brands that include Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar.
Presence across key consumption markets with a cluster-based approach.
- Company operated 655 stores across all brands and were present in 26 states and three union territories across 155 cities in India, as of March 31, 2021.
- Company has a strong presence in key metro regions of Delhi NCR (comprising Faridabad, Ghaziabad, Gurgaon, Delhi and Noida), Bengaluru, Kolkata, Mumbai and Hyderabad.
- As of March 31, 2021, company had 304 stores of our Core Brands located in these five major metros in India.
- Over the years, company has been consistently increasing the number of stores both organically and inorganically. Stores in Core Brands Business increased from 469 stores as of March 31, 2019 to 605 stores as of March 31, 2021.
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 |
|---|---|---|---|
| Revenue | 1326.3 | 1535.0 | 1198.8 |
| Net Profit | (-94.1) | (-121.4) | (-62.9) |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Devyani International Ltd | 1 | (0.50) | N.A | (48.52%) | 1.03 |
| Jubilant FoodWorks Ltd | 10 | 21.22 | 132.93 | 24.95 | 85.02 |
| Westlife Development Ltd | 2 | (6.38) | N.A | (20.66) | 30.89 |
| Burger King India Ltd | 10 | (2.87) | N.A | (27.80) | 10.31 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 4th August 2021 |
| Issue Closes on:. | 6th August 2021 |
| Issue Price | Rs. 86 90 |
| Face Value | Rs.1 |
| Retail Category Allocation | 10% |
| Minimum Lot | 165 shares |
| Minimum Investment | Rs. 14,850 |
| Issue Constitutes | 16.98% |
| Issue Size | Rs.1838 cr ($248 million) |
| Market Cap | Rs. 10,822 cr ($ 1.46 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 4,88,88,888 |
| Equity Shares Offered (OFS | 15,53,33,330 |
| Total Equity Shares Offered (Fresh + OFS) | 20,42,22,218 |
| Equity Shares Prior to the Issue | 115,36,34,990 |
| Equity Shares after the Issue | 120,25,23,878 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | On or Before 11th August 2021 |
| Initiation of Refunds | On or Before 12th August 2021 |
| Credit of Equity Shares: | On or Before 13th August 2021 |
| Listing Date: | On or Before 16th August 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 6,11,01,666 | 0.77 | 1.32 | 95.27 |
| NII | 3,05,50,832 | 0.80 | 6.68 | 213.06 |
| Retail | 2,03,67,221 | 11.37 | 23.16 | 39.37 |
| Employee | 5,50,000 | 1.56 | 3.12 | 4.70 |
| TOTAL | 11,25,69,719 | 2.69 | 6.73 | 116.68 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| (-0.50) | N.A | (-48.52%) | 1.03 |
| Check IPO Allotment Status: |
|---|
Link InTime Website https://linkintime.co.in/PublicIssue/BSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Devyani International Ltd Plot No. 18, Sector-35 Gurugram 122 004 Haryana, India Tel: 011 4170 6720; E-mail: companysecretary@dil-rjcorp.com; Website: www.dil-rjcorp.com |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C 101, 247 Park L.B.S. Marg Vikhroli (West) Mumbai 400 083 Maharashtra, India Tel: +91 22 4918 6200 E-mail: devyani.ipo@linkintime.co.in Website: www.linkintime.co.in |
