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Sapphire Foods IPO: Date, Details and Overview 3 min read

November 9, 2021 3 min read

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Sapphire Foods IPO: Date, Details and Overview 3 min read

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Sapphire Foods India which operates a chain of lip-smacking foods served by KFC, Pizza Hut and Taco Bell went live with its Initial Public Offering worth Rs. 2,073 crores.

The Sapphire Foods India has fixed a price band of Rs. 1,120- 1,180 per share.

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 Rs. 2,073 crore.

The Sapphire Foods IPO market lot size is 12 shares. A retail-individual investor can apply for up to 14 lots (168 shares or Rs. 198,240). The issue opens on Tuesday, Nov. 09, 2021 and the issue closes on Thursday, Nov. 11, 2021. 

QSR Management Trust and Sapphire Foods Mauritius Limited are the company promoters.

Know the company

Sapphire Foods India Limited is one of YUM’s franchisee operators in the Indian subcontinent with revenue from operations of Rs.1,340.412 crore and Rs. 1,019.61 crore for the financial years 2020 and 2021, respectively. It is also Sri Lanka’s largest international QSR chain, in terms of revenue for the financial year 2021 (with revenue of Rs. 1.90 billion representing 35% of the total market revenue), and number of restaurants operated as of March 31, 2021 (with 68 restaurants representing 39% of the total number of outlets in the market) (Source: Technopak Report). 

It has also established a presence in the Maldives. As of June 30, 2021, the company has owned and operated 209 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.

Objective of the issue

  • Carry out the offer for sale of up to 17,569,941 equity shares by the selling shareholders
  • Achieve the benefits of listing the equity shares on the stock exchanges, and
  • Enhancement of company’ s brand name amongst existing and potential customers and creation of a public market for equity shares in India

Strengths of the Company

  1. The company is one of the leading QSR brands with a substantial market presence and scale. 
  2. Strong relationship with YUM
  3. Continuous focus on delivering great customer experience. 
  4. The company has good operational excellence and has scalable new restaurant economic model for expansion.
  5. The company has an experienced management team. 

Risks Involved

  1. The company is still facing after effects of Covid-19 pandemic.
  2. Failure in its quality control systems for its supply chain could lead to the termination of the Franchisee Arrangement. 
  3. The company has reported restated loss for the year after tax for the financial years 2021, 2020 and 2019. 
  4. There are material outstanding legal proceedings involving the company and its subsidiaries. 
  5. Inability to recognize and respond to changes in consumer preferences and food habits could have an adverse effect on its business.
  6. Its marketing and communication campaigns may not be effective in increasing the brand awareness. 

Financial Data

IPO

 

IPO Timeline

Sources – RHP, BLRM

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