KFC, Pizza Hut operator Sapphire Foods IPO kicks off for subscription; check price band, GMP
The primary offering is entirely an offer for sale (OFS), in which its existing shareholders and promoters are offloading 17,569,941 equity shares in the range of Rs 1,120-1,180 each.
Sapphire Foods India Ltd, which operates KFC and Pizza Hut and Taco Bell outlets, kicked off for subscription on Tuesday with the price band fixed at Rs 1,120-1,180 a share for its initial public offering and will conclude on November 11. The initial public offering is expected to raise Rs 2,073 crore. The company on Monday said it has raised Rs 933 crore from anchor investors ahead of its IPO rollout.
As of 10:55 am on day 1 of the bidding, Sapphire Foods IPO has been subscribed 0.16 times with retail category booked 0.86 times, BSE data showed. The primary offering is entirely an offer for sale (OFS), in which its existing shareholders and promoters are offloading 17,569,941 equity shares in the range of Rs 1,120-1,180 each.
As per market observers, the shares of the company are expected to list on stock exchanges BSE and NSE on November 22, 2021. Sapphire Foods shares are available at a premium (GMP) of Rs 120 in the grey market.
Those at Choice Broking have recommended to Subscribe with Caution. “While valuation seems reasonable compared to peers, we are concerned about business profitability due to higher likelihood of continuing incurring losses in the coming fiscals Additionally, the company has short operating history as it started franchise operations with YUM brands in 2015," the brokerage note stated.
Sapphire Foods is YUM’s largest franchisee operator in the Indian subcontinent. The company’s association with Yum started in 2015 and they presently have the non-exclusive rights to operate restaurants under 3 of YUM’s leading brands, namely, the KFC, Pizza Hut and Taco Bell brands in India, Sri Lanka and Maldives territories.
Despite reporting losses for the last few years, analysts are firm on the bullish prospects of the company and competitive valuations, which leaves some value on the table for investors and hence suggest investors to subscribe to the issue.