KFC Operator Devyani IPO subscribed 2.69 times on Day 1: Check GMP, Allotment Date Here

The initial public offering (IPO) of Devyani international has subscribed 2.69 times on August 4, which was the first day of bidding. The KFC, Pizza Hut and Costa Coffee operator placed its Rs 1,838-crore initial public offering on August 4 and is willing to sell shares at Rs 86-90 apiece. The IPO has a fresh issue of Rs 440 crore and an offer-for-sale of Rs 1,398 crore by the existing shareholders. The company wants to reach a valuation of Rs 10,823 crore.

DIL will be using the proceeds to repay payments of previous borrowings as the net debt stood at Rs 541.58 crore on June 30. The company reported a loss in operating revenue after posting profits in each of the last three years. The remaining funds will be used for general corporate expenses. The company allotted 9.16 crore shares to 63 anchor investors before its IPO and raised Rs 824.8 crore due to the same. The IPO will be closing on August 6. Devyani International is likely seeking an allotment date of August 11 and a listing date of August 16, which is yet to be confirmed. Devyani International has been in the market for a long time and is one of the largest operators of fast food outlets in the country. DIL handles the activities of Yum Brands in India and operates brands like KFC, Pizza Hut and Costa Coffee under its name. The purpose of raising an IPO was however to expand its own brands like Vaango and Food Street. At least 94% of its revenue is generated from KFC, Pizza Hut and Costa Coffee while, only the remaining six percent is generated by its own brands.

ICICI's review of DIL

In an IPO review on their website, ICIC Direct projected that the shares will grow at a rate of 12% over the next five years as rapid growth in the fast-food sector will be helped by the surge of younger population that have higher income levels and more disposable income than ever before. However, the pandemic could be the reason for the growth to stall. Further, 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.”