Yum Brands franchise partner Sapphire Foods India has come out with an initial public offer (IPO) aiming to raise up to Rs 2,073 crore. The IPO will open on Tuesday, November 9 and will close on November 11.

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Speaking about the company, Anil Singhvi, Managing Editor at Zee Business said that Sapphire Foods India started in 2009 and operates KFC and Pizza Hut outlets in India, Sri Lanka and the Maldives.

 

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He said that as per the information, till June 30, 2021 the company operates 209 KFC Restaurant in India and Maldives and 239 outlets of Pizza Hut in India, Sri Lanka and Maldives.

It can be noted that Sapphire Foods has fixed a price band of Rs 1,120-Rs 1,180 a share for its IPO and plans to raise Rs 2,073 crore at the upper price band. The IPO will be entirely an offer for sale (OFS) of 1,75,69,941 equity shares by promoters and existing shareholders. Also, the company is not going to receive any proceeds from the offer.

 

Talking about the ownership structure of the company, Sapphire Foods India Group CEO and Whole time Director, Sanjay Purohit said that the operation of the company started in the year 2015-16 and then Private Equity Investors had invested in the company. "And we know that the normal investment duration of private equity investors is of 7-10 years and some of our private equity investors wanted to do partial disinvestment and wanted partial exit and for that IPO is the most preferred choice," he added.

While speaking on competition with Divyani Foods, he said that Divyani Foods is the sister franchise and is not a competition, they hold a different territory in KFC and we hold a different territory. In Pizza Hut also the situation is almost same, he added. So, Purohit thinks that both the companies are working together.

Vijay Jain CFO, Sapphire Foods India, spoke on the profitability of the company and said that the company has come into an existence operationally 5-6 years ago and had acquired 7-8 franchise of Yum.

From then the company's scale in terms of store count has almost doubled and in terms of operating profit in QSR industry the company is already in top 3. He added that in quick service restaurant industry, the growth which is being predicted going forward is that the profit will double over next 5 years in organised food sector that is till FY 25 and the market share of QSR sector is expected to be around 54 percent.

Speaking on expansion plan Purohit said that he cannot give the exact numbers because of SEBI's restrictions but added that last year the company's sale declined by 24 percent mostly in 1st half due to Covid and its restrictions. But in second half as the restrictions opened their sales improved.

He also said that the company has already raised Rs 474 crore of primary funds through the private placement, which will fund its expansion plans.