Sapphire Foods makes good debut; gains 17% against issue price post listing

The stock listed at Rs 1,350, a 14 per cent premium against issue price of Rs 1,180 per share on the National Stock Exchange

Sapphire Foods, quick service restaurant (QSR) company, made a healthy stock market debut on the bourses on Thursday. The shares of the company that owns and operates Pizza Hut and KFC chain of stores listed at Rs 1,350, a 14 per cent premium against issue price of Rs 1,180 per share on the National Stock Exchange (NSE). On the BSE, the stock opened at Rs 1,311, an 11 per cent premium over its issue price.

Post listing, shares of Sapphire Foods moved higher to Rs 1,383.60 on the BSE and Rs 1,380 on the NSE. At 10:09 am, it was trading 14 per cent higher at Rs 1,346 on both the exchanges. A combined 3 million equity shares had changed hands on the NSE and BSE till the time of writing of this report.

The Rs 2,073-crore initial public offering (IPO) of Sapphire Foods India had received good response from investors with the issue getting nearly 7 times more demand than the shares on offer. The qualified institutional buyers (QIBs) portion garnered 7.5 times subscription, the high networth individual (HNI) portion was subscribed 3.5 times and the retail quota garnered nearly 8.7 times subscription.

Sapphire Foods is one of the Yum brand's restaurant operators in the Indian subcontinent. It is also Sri Lanka’s largest QSR chain as per FY21 revenues. The company operates 482 stores with 219 KFC & 188 Pizza Hut stores in India. It has another 73 stores in Sri Lanka and two in Maldives. The company operates KFC & Pizza Hut brands in India, Sri Lanka & Maldives and Taco Bell operations in Sri Lanka. It operates under a three-way franchisee arrangement for Yum in India

"The company enjoys a strong relationship with Yum Brands of US, which enables it to use Yum’s system, system property and expertise in building and establishing brands and operating large-scale restaurants chains. The company is optimising its restaurant size to reduce the costs in form of operations costs as well as the capex incurred. This would improve the profitability & reduce the payback period of outlet as well," ICICI Securities had said in an IPO note.