Devyani International IPO Analysis
Devyani International Ltd was incorporated in 1991. Devyani International Ltd is the largest franchisee of Yum Brands. It is among the largest quick-service restaurants (QSR) chain operators in India with 655 stores across 155 cities all over the country as of Mar 31, 2021. Ravi Kant Jaipuria, Varun Jaipuria, and RJ Corp Limited are the company promoter. Yum Brands Inc operates many fast food brands i.e. Pizza Hut, KFC, and Taco Bell brands.
It operates 3 business verticals. These verticals involve core brands like (KFC, Pizza Hut, and Costa Coffee stores in India), International Business (stores in foreign countries i.e. Nepal and Nigeria), and Other Businesses (own branded stores i.e. Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar).
Initially, the company started its business with a Pizza Hut store in Jaipur but subsequently expanded operations in both KFC and Pizza hut. As of 31st March 2021, it operates 264 KFC stores, 297 Pizza Hut stores, and 44 Costa Coffee stores in India.
The company have disciplined financial approach with a strong focus on cash flow management. The product portfolio is also of well-recognized QSR brands. It has the largest franchisee of Yum Brands in India.
For FY 21, the company had total assets of Rs 16684.07 million and a Revenue of Rs. 11988.95 million. Both assets & revenue showed a decreasing sign from the past two financial years, which is not a good sign.
The opening IPO date is 4th August 2021 till 6th August 2021, with the IPO price of Rs 86 to Rs 90 per equity share. The issue size of the IPO is supposed to be Rs 1838 Cr. Considering the domain of the company & future prospects of this sector, investing into the stock for a long term will be a prudent decision. Since the deeper market penetration can lead to higher sales & per unit cost efficiency, the company will be able to generate sufficient profits in future. IPO stands out to be a good investment option for the long term.
