Yum Brands franchise partner Sapphire Foods India has launched an Initial Public Offering (IPO) to raise to Rs 2,073 crore. The IPO will open on Tuesday, November 9 and close on November 11.

Speaking about the business, Anil Singhvi, editor-in-chief of Zee Business, said that Sapphire Foods India started in 2009 and operated KFC and Pizza Hut outlets in India, Sri Lanka and the Maldives.

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He said that according to reports, until June 30, 2021, the company was operating 209 KFC restaurants in India and the Maldives and 239 Pizza Hut outlets in India, Sri Lanka and the Maldives.

It can be noted that Sapphire Foods has set a price range of Rs 1,120 to Rs 1,180 per share for its IPO and plans to increase Rs 2,073 crore at the upper price range. The initial public offering will be entirely an offer to sell (OFS) of 1,75 69,941 shares by the promoters and existing shareholders. In addition, the company will not receive any proceeds from the offering.

Speaking about the ownership structure of the business, Sanjay Purohit, CEO and full-time director of Sapphire Foods India Group, said that the operation of the business started in 2015-16, after which private investors invested. in the business. “And we know that the normal investment term for private equity investors is 7-10 years and some of our private equity investors wanted to do a partial divestment and wanted a partial exit and for this IPO is the most preferred choice, ”he added.

Speaking about the competition with Divyani Foods, he said that Divyani Foods is the sister franchise and is not a competition, they hold different territory in KFC and we hold different territory. At Pizza Hut, the situation is also almost the same, he added. So, Purohit believes the two companies are working together.

Vijay Jain CFO, Sapphire Foods India, spoke about the profitability of the business and said the business started 5-6 years ago and acquired 7-8 franchises from Yum.

Since then, the scale of the company in terms of number of stores has almost doubled and in terms of operating profit in the fast food industry, the company is already in the top 3. He added that in the fast food industry, the growth that is predicted in the future is that the profit will double in the next 5 years in the organized food business up to fiscal year 25 and the QSR business market share should be around 54 percent.

Speaking on the expansion plan, Purohit said he couldn’t give exact numbers due to SEBI’s restrictions, but added that last year the company’s sales were down 24%, mainly in the 1st semester due to Covid and its restrictions. But in the second half, as restrictions opened, their sales improved.

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