Devyani International IPO subscribed 6.61 times on second day of its listing

The initial public offer (IPO) of Devyani International got subscribed 6.61 times on Thursday, the second day of subscription. It is the largest operator of the franchisee of Pizza Hut, KFC, and Costa Coffee in India. The company's IPO comprises a fresh issue of up to Rs 440 crore and an offer for sale of up to 15,53,33,330 equity shares worth almost Rs 1400 crore. According to the NSE data, the Rs 1,838-crore IPO received bids for 74,40,74,100 shares against 11,25,69,719 shares on offer on Thursday.

The category for Qualified Institutional Buyers (QIBs) was subscribed 1.32 times. The non-institutional category of investors was subscribed 6.37 times, while the Retail Individual Investors (RIIs) category was subscribed 22.94 times. The IPO has been operating at a price range of Rs 86-90 per share. Devyani International announced on the first day of its listing that it has mobilised Rs 825 crore from existing investors. The share sale opened for subscription on Wednesday and was fully subscribed on the first day itself. The IPO will be closing on August 6.

Proceeds from the fresh issue will be used to repay debt and for general corporate expenses. Devyani International is an associate company of RJ Corp and is the largest franchisee of Yum Brands. Apart from operating core brands such as Pizza Hut, KFC and Costa Coffee, DIL wants to expand the business of its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar. It currently controls 297 Pizza Hut stores, 264 KFC stores, and 44 Costa Coffee outlets across India and these three brands produce 94% of their total income. The financial offers are managed by Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and Motilal Oswal Investment.

ICICI's positive feedback on the DIL shares

ICIC Direct predicted that the DIL shares will grow at a rate of 12% per annum over the next five years because of the growth in popularity of the fast-food sector. This will be further enhanced by the increase in the younger population with more disposable income. The ICICI Direct said in a statement, “We believe 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 the future. We recommend SUBSCRIBE to the issue.”

(With PTI inputs)