The initial public offer (IPO) of Devyani International has been subscribed 6.41 times on August 5, the second day of bidding.
According to the subscription data available on the exchanges till 16:10 IST, the offer has received bids for 72,19,84,065 equity shares against the IPO size of over 11,25,69,719 equity shares.
The IPO consists of fresh issue of equity shares worth Rs 440 crore and an offer-for-sale of up to 155,333,330 equity shares by promoter and existing shareholder.
Under the offer-for-sale, Dunearn Investments (Mauritius) Pte Ltd, a wholly owned subsidiary of Temasek Holdings, will offload 6,53,33,330 shares and promoter RJ Corp will sell 9 crore shares.
The company has already raised Rs 824.87 crore from 63 anchor investors on August 3. Proceeds from the fresh issue will be used to retire debt and general corporate purposes.
Anand Rathi is positive on prospects of the IPO. “At the upper end of the IPO price band, Devyani International is offered at 9.5 times market capitalization / sales as per FY21 financial statement, compared to peers like Jubilant Foodworks Ltd. (15x), Westlife Development Ltd. (8.8x), Burger King India Ltd. (14x). We believe the company remains well placed for long-term growth considering the company’s portfolio of recognized global brands catering to a range of customer preferences, cross brand synergies, expansion of store network and EBITDA positive earnings; we give this IPO a “Subscribe” rating.”
BP Equities has given a ‘subscribe’ rating for the long term, considering the expected improvement in financial performance and visible growth drivers.
“On the valuation front, based on upper price band and diluted equity shares the company is valued at 9.54x Price/Sales which is reasonably priced when compared to its listed industry peers (i.e, Jubilant Foodworks – 12.9x, Burger King India – 14.4x and Westlife Development – 8.81x),” the brokerage said.
Marwadi Financial Services has assigned a subscribe rating to the IPO.
“Considering the FY21 adjusted EBITDA of Rs 178.92 crore on post issue basis, the company is going to list at EV/EBITDA of 62.39 with a market cap of Rs 10,822.7 crore, while its peers namely Jubilant Foodworks and Westlife Development are trading at EV/EBITDA of 66.02 and 206.11, respectively,” said Marwadi Financial Services.
The company is the largest franchisee of Yum Brands, operating core brands such as Pizza Hut, KFC, Costa Coffee besides its own brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli and Ckrussh Juice Bar.
It currently operates 297 Pizza Hut stores, 264 KFC stores and 44 Costa Coffee as on March 2021 in India.
The allotment of shares will be done on August 11,2021 and the company will make its market debut on August 16, 2021.