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The shares of Sapphire Foods India listed at a premium today. Sapphire Foods India shares were hit 1,383 in early trade as compared to issue price of 1,180 per share.  The 2,073-crore IPO of Sapphire Foods India, which operates KFC and Pizza Hut outlets in the Indian subcontinent, was subscribed 6.62 times. 

The portion for Qualified Institutional Buyers (QIBs) was subscribed 7.50 times, while those for Retail Individual Investors (RIIs) 8.70 times and non institutional investors 3.46 times. The company had set a price band of 1,120-1,180 per share.

Ahead of the IPO, Sapphire Foods India had raised 933 crore from anchor investors. Sapphire Foods, an omnichannel restaurant operator and the largest franchisee of Yum Brands in the Indian sub-continent, is backed by marquee investors such as Samara Capital, Goldman Sachs, CX Partners and Edelweiss.

As of March 31, 2021, Sapphire Foods owned and operated 204 KFC restaurants in India and the Maldives, 231 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.

JM Financial, BofA Securities India, ICICI Securities and IIFL Securities were the managers to the offer.

“Sapphire Foods India Limited is YUM’s largest franchisee operator in the Indian subcontinent with wide product offerings across the brands. The company is operating under QSR category with an omni channel presence. The company has been optimizing its stores by reducing its space as a part of its cost saving strategy. Although, the bottom line of the company is negative, it is positive at the operating level with operating margin of 12-14% in FY19-21 backed by a strong balance sheet. In terms of relative valuation, the company’s issue is available at price to sales of 6.10 as on FY21, which is cheaper in comparison to its listed peers," Canara Bank Securities had said in a IPO note, recommending subscribe for long term.  (With Agency Inputs)


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