Home / Markets / Ipo /  Sapphire Foods IPO: Latest GMP, subscription status on last day of issue

Sapphire Foods India Ltd, which operates KFC and Pizza Hut outlets, on Monday said it has raised 933 crore from anchor investors ahead of its IPO rollout. Its initial share-sale opened for subscription on Tuesday and will conclude on November 11 with the price band fixed at 1,120-1,180 a share for its initial public offering.

As of 11:35 am on final day of the bidding, Sapphire Foods IPO has been subscribed 1.56 times with retail category overbooked 6.32 times, BSE data showed. Non Institutional Investors (NIIs) bid 0.41 times and QIBs 0.54 times. 

The IPO will be entirely an offer for sale (OFS) of 1,75,69,941 equity shares by promoters and existing shareholders. At the upper end of the price band, the initial public offering is expected to fetch 2,073 crore.

As per market observers, Sapphire Foods shares premium (GMP) in the grey market has slipped to 55 today. The shares of the company are expected to list on stock exchanges BSE and NSE on 22nd November 2021.

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 the Territories.

“Sapphire Foods IPO is decently priced, its offered at mkt cap to sales ratio of 6.78x to its FY21 sales. Pricing becomes more lucrative considering the fact that during FY21 sales got impacted due to Covid related lockdown and protocols. We recommend SUBSCRIBE to the issue for both listing gains as well as long term wealth creation," said KRChoksey in a note.

As of June 30, 2021, it owned and operated 209 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and 2 Taco Bell restaurants in Sri Lanka. Total number of restaurants are 450 as of June 30, 2021.

“Further, Sapphire Foods India has a better revenue per store compared to Devyani International. On the EBITDA front, the company is continuously showing improvement. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue," said brokerage Angel One.

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