Sapphire Foods IPO: KFC operator subscribed 89% on Day 2, retail portion booked 4.54 times

Sapphire Foods IPO: KFC operator subscribed 89% on Day 2, retail portion booked 4.54 times

Sapphire’s initial public offering, which operates KFC and Pizza Hut restaurant, accepted an offer for 86.03 Lakh equity shares against the size of the IPO 96.63 shares of Equity Lakh, subscribing to 89 percent on November 10, the second day of the offer.

Retail investors remain at the forefront, subscribe to 4.54 times the portions provided for them. Institutional investors who meet the requirements, so far, have bid only 2 percent of their stock quota, while non-institutional investors buy 20 percent of shares from their portions.

Offer Sapphire Foods saw a subscription of 49 percent on the first day of the offer.

The company plans to collect Rs 2,073 Crore via IPO which is fully offered by promoters and investors. This offer is closed November 11.

The price band has been repaired at Rs 1,120-1,180 per share. Anchor investors invested RS 933 Crore at the company in the top price ribbon.

“On a higher price ribbon of Rs 1.180, this problem is assessed on the P / S (price-to-sales) 7.4x which is a discount for peeking (Devyani International on P / S from 14.8x and the average peer p / S 12.8x. While the assessment seems reasonable compared to peers, we are worried about business profitability because of higher possibilities to continue to cause losses in the coming fiscal, “Choice Broking said” subscribed to carefully “for this problem .

The company has a short operating history when starting a franchise operation with the YUM brand in 2015, the broker said.

Sapphire food collaborated with the YUM brand in 2015 which operates brands such as KFC, Pizza Hut and Taco Bell brand globally in more than 150 countries. With yum franchise agreements, the company now has non-exclusive rights to operate restaurants under three leading brands Yum, namely KFC, Pizza Hut and Taco Bell Brands.

The food service market in India is projected to record 8 percent to Rs 6.21,100 Crore during the FY20-FY25.

“QSR channel (Quick Service Restaurant) is expected to lead the food service sector in terms of sales and transactions. With strong demand drivers for the food service sector, there will be abundant growth opportunities for QSR players in this country,” Choice Broking said.

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