The Initial Public Offering of Sapphire Foods India, a quick-service restaurant operator which franchises Yum! Brands in India opened on Tuesday, November 9. Yum! operates brands such as KFC and Pizza Hut, whose outlets Sapphire Foods runs in India. Sapphire Foods India's public issue will entirely be an offer of sale (OFS) of 17,569,941 equity shares by promoters and existing shareholders. Since it is entirely OFS, all the money raised will go to the shareholders offloading their stock, and not to the company.
Investors will need to bid for a minimum of 12 shares (known as lot size) and in multiples of 12 after, with a minimum investment of Rs 13,440. The company has fixed a price band of Rs 1,120-1,180 a share for its IPO. At the upper end of the price band, the initial public offering is expected to fetch Rs 2,073 crore.
Here are five things to know about Sapphire Foods IPO:
> As of June 30, 2021, the company said it owns and operates 209 KFC restaurants in India and Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives and two Taco Bell restaurants in Sri Lanka.
> As part of the OFS, QSR Management Trust will sell 8.50 lakh shares, Sapphire Foods Mauritius Ltd will offload 55.69 lakh shares, WWD Ruby Ltd will divest 48.46 lakh shares and Amethyst will offer 39.62 lakh shares. In addition, AAJV Investment Trust will sell 80,169 shares, Edelweiss Crossover Opportunities Fund will offload 16.15 lakh shares and Edelweiss Crossover Opportunities Fund-Series II will divest 6.46 lakh shares.
> The company announced on Monday that it has raised nearly Rs 933 crore from anchor investors ahead of the IPO. A total of 79,06,473 equity shares were allocated to 53 anchor investors at Rs 1,180 apiece. Government of Singapore, Monetary Authority of Singapore, Fidelity Funds, Abu Dhabi Investment Authority, Morgan Stanley Asia (Singapore) Pte, ICICI Prudential Life Insurance Company, Bajaj Allianz Life Insurance Company and Sundaram Mutual Fund (MF) are among the anchor investors.
> The company said that up to 75% of the shares have been reserved for qualified institutional buyers (QIBs), 15% for non-institutional buyers and the remaining 10% for retail investors.
> The company competes with companies such as Devyani International (operates the highest number of outlets of KFC, Pizza Hut and Costa Coffee), Jubilant Foodworks (franchises Domino’s Pizza and Dunkin’ Donuts), Westlife Development (who has the franchise for McDonald's in west and South India), and Burger King. Devyani International, which is the other franchisee of Yum! Brands in India, operates 297 Pizza Hut stores and 264 KFC stores.
Sapphire Foods’ IPO comes as hectic fundraising through IPOs continues through the week, with Paytm parent company One97 Communications’ IPO opening on November 8, and Latent View Analytics set to launch on November 10.
Also read: Paytm IPO open: Five things to know
This comes after five companies successfully concluded their public offerings (IPOs) last week — FSN E-Commerce Ventures, which runs Nykaa; Fino Payments Bank; Policybazaar parent entity PB Fintech; decorative aesthetics supplier SJS Enterprises; and microcrystalline cellulose maker Sigachi Industries.
With inputs from PTI