Sapphire Foods Listing: Sapphire Foods India, the company that runs KFC and Pizza Hut, had a strong start in the market. Amid weak trends in the domestic equity market, it gave investors better listing gains on Thursday. Shares of Sapphire Foods were listed today at Rs 1,311 per share. This is at a premium of 11.10% over the issue price of Rs 1180, i.e. the investors have made a profit of Rs 131 per share on listing. This IPO of Rs 2073 crore got a great response from investors. All categories of investors oversubscribed their share of the issue, due to which it got 6.62 times subscription on the last day.
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The IPO of Sapphire Foods was purely an offer for sale. Under the issue, the promoters and existing shareholders of the company sold 1.75 crore equity shares. The company had fixed a price band of Rs 1,120-1,180 per equity share. Analysts said Sapphire Foods has seen losses in the last few periods (FY19-20) and its financials have not been very good. The net sales of Sapphire Foods fell from Rs 1,193 crore in the financial year 2018-19 to Rs 1,019 crore in the previous financial year. The company has reported losses in the last three years with an EBITDA margin of 12.2%. As of September 2021, the company operates 219 KFC stores, 261 Pizza Hut stores and 2 Taco Bell stores. Players like Domino’s, McDonalds, KFC, Pizza Hut & Burger King hold majority stake in India’s major QSR brands.
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- Analysts at ICICI Direct Research said there is a lot of competition in the QSR chain sub-segment of the food services industry. The company’s competition is mainly from international QSR chains operating in India, Sri Lanka and Maldives. Among them McDonald’s, Burger King, Domino’s Pizza and Subway are the major companies. Along with this, the company’s competition is also with local restaurants in the QSR segment. Analysts said, “These QSR chains are offering food products that cater to the preferences of the local people.”
- Sapphire Foods is an omni-channel restaurant operator as well as the largest franchise company of Yum Brands in the Indian sub-continent. It runs restaurants of brands like KFC, Pizza Hut and Taco Bell in the country. Sapphire Foods was established in the year 2015. It monitors the experience of their customers with the restaurant through a Sophisticated Guest Experience Survey (GES) system. GES system is a third party tool used worldwide to measure customer satisfaction.
(Article: Surbhi Jain)
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