About the Company:
Sapphire Foods India Ltd is YUM’s largest franchisee operator in the Indian subcontinent in terms of revenue in the financial year 2020.
Company is also Sri Lanka’s largest international QSR chain in terms of revenue for the financial year 2021 and number of restaurants operated as of March 31, 2021
Company also has established a presence in the Maldives.
As of March 31, 2021, company owned and operated 204 KFC restaurants in India and the Maldives, 231 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.
Total number of restaurants operated by the company grew from 376 restaurants as of March 31, 2019 to 437 restaurants as of March 31, 2021
Franchisee arrangement with Yum Brands:
Sapphire Foods India Ltd franchisee arrangement with YUM allows company to operate, on a non-exclusive basis, under the KFC brand in several states in India and across the Maldives, the Pizza Hut brand in several states in India and across Sri Lanka and the Maldives, and the Taco Bell brand across Sri Lanka.
Key financial and operating metrics for KFC in India:
Key financial and operating metrics for Pizza Hut in India:
Company’s Operations in Sri Lanka.
Company operates in Sri Lanka through a subsidiary, Gamma Lanka , which is presently the single franchisee for Pizza Hut and Taco Bell in Sri Lanka.
Pizza Hut was the first international QSR chain to enter the Sri Lankan food and beverage sector in 1993 .
Company opened the first Taco Bell restaurant in Colombo in 2017. Taco Bell in Sri Lanka has various types of tacos, chalupas, burritos and other related items. Company operates two Taco Bell restaurants in Sri Lanka as of March 31, 2021.
Company is the largest international QSR chain in Sri Lanka in terms of revenue for the financial year 2021 and number of restaurants operated as of March 31, 2021.
Company’s Operations in Maldives.
In the Maldives, company operates one KFC restaurant and one Pizza Hut restaurant in the city of Malé, through indirect subsidiary, Gamma Island Food Private Limited (“Gamma Maldives”).
Company’s Store Count & Revenue: (KFC India, Pizza Hut India and Sri Lanka Business)
Management Team:
- Mr. Sanjay Purohit (Designation: Whole time Director and Group CEO)
- Mr. Sunil Rewachand Chandiramani (Designation: Chairman and Independent Director)
Objectives of the Issue:
Fresh Issue: (Rs. 2073 cr)
Company will not receive any proceeds from the Offer and all the Offer Proceeds will be received by the Selling Shareholders.
Positives for the Company:
Leading QSR brands with a substantial market presence and scale.
- Company is one of India’s largest restaurant franchisee operators, in terms of revenue for the financial year 2020 and number of restaurants operated as of December 31, 2020.
- As of March 31, 2021, company owned and operated 204 KFC restaurants in India and the Maldives, 231 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.
Strong relationship with YUM.
- Sapphire Foods India Ltd is YUM’s largest franchisee operator in the Indian subcontinent in terms of revenue in the financial year 2020.
- Company’s association with YUM started in 2015 and company presently has the non-exclusive rights to operate restaurants under three of YUM’s leading brands, namely, the KFC, Pizza Hut and Taco Bell brands.
- Sapphire Foods India Ltd’s Franchisee Arrangement allows company to operate under the KFC brand in several states in India and across the Maldives, the Pizza Hut brand in several states in India and across Sri Lanka and the Maldives, and the Taco Bell brand across Sri Lanka.
Rising income levels to boost the growth of the food services sector in India.
- The increase in the quality of education, rising income levels of the younger demographic groups, rising urbanization, growing working age population and increase in the number of middle-class households, among other factors, are expected to continue to stimulate growth in per capita consumption.
- Together with increasing market proliferation of brands, these factors are expected to boost the growth of the food services sector in India
Financials of the Company:
| (in Crores) | FY 19 | FY 20 | FY 21 | 30th June 21 |
|---|---|---|---|---|
| Revenue | 1206.2 | 1351.7 | 1081.2 | 313.9 |
| Net Profit | (-69.4) | (-159.2) | (-99.8) | (-26.4) |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Sapphire Foods India Ltd | 10 | (-19.04) | N.A | (-22.16%) | 84.16 |
| Jubilant FoodWorks Ltd | 10 | 17.55 | 211.73 | 16.16% | 108.12 |
| Westlife Development Ltd | 2 | (-6.38) | N.A | (-20.66) | 30.89 |
| Burger King India Ltd | 10 | (-5.47) | N.A | (-25.82%) | 17.59 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 9th November 2021 |
| Issue Closes on:. | 11th November 2021 |
| Issue Price | Rs.1120 -1180 |
| Face Value | Rs. 10 |
| Retail Category Allocation | 10% |
| Minimum Lot | 12 shares |
| Minimum Investment | Rs.14,160 |
| Issue Constitutes | 27.65% |
| Issue Size | Rs.2073 cr ($276 million) |
| Market Cap | Rs.7498 cr ($ 1 billion) |
| Listing at | NSE & BSE |
| Equity Shares Offered (OFS) | 1,75,69,941 |
| Equity Shares Prior to the Issue | 6,35,42,541 |
| Equity Shares after the issue | 6,35,42,541 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | On or Before 16th November 2021 |
| Initiation of Refunds | On or Before 17th November 2021 |
| Credit of Equity Shares: | On or Before 18th November 2021 |
| Listing Date: | On or Before 22nd November 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 | 52,70,983 | 0.02 | 0.03 | 7.50 |
| NII | 26,35,491 | 0.05 | 0.29 | 3.46 |
| Retail | 17,56,994 | 2.56 | 5.37 | 7.76 |
| Employee | ——– | —– | —– | —- |
| TOTAL | 96,63,468 | 0.49 | 1.07 | 6.45 |
Note: Retail Subscription on the basis of Applications: 6.75X
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| (-19.04) | N.A | (-22.16%) | 84.16 |
| Check IPO Allotment Status: |
|---|
Link InTime Website: https://linkintime.co.in/PublicIssue/BSE IPO Website: https://www.bseindia.com/IPO/Allotment |
| Company Contact Info: |
|---|
| Sapphire Foods India Ltd Office: 702, Prism Tower, A Wing, Mindspace, Link Road, Goregaon (West), Mumbai, 400 062, Maharashtra, India. Tel.: +91 22 6752 2343 E-mail: investor@sapphirefoods.in; Website: https://www.sapphirefoods.in |
| IPO Registrar Info: |
|---|
| Link Intime India Private Limited C 101, 247 Park, L. B. S. Marg Vikhroli (West) Mumbai 400 083 Tel: +91 22 4918 6200 E-mail: sapphire.ipo@linkintime.co.in Website: www.linkintime.co.in |
