Franchise operator of KFC and Pizza Hut restaurants, Sapphire Foods, began their first-day trade today, 18 November, with a decent premium of 15 percent, falling largely on expected lines.
On the Bombay Stock Exchange (BSE), the stock listed at Rs 1,360.75 apiece and on the National Stock Exchange, the opening price was Rs 1,368 per share against the issue price of Rs 1,180.
According to news reports, the initial public offering (IPO) of Sapphire Foods received a decent and good response from investors as it was subscribed 6.62 times from 9 to 11 November.
Additionally, for qualified institutional buyers (QIB) the portion set aside was booked 7.5 times and while for non-institutional investors (NII), the company saw a 3.46 times subscription. From the reserved portion, retail investors bought shares 8.7 times.
The public issue of Sapphire Foods, which was entirely for sale by selling the stock of shareholders and promoters, helped it earn Rs 2,073 crore. This largely became one of the reasons for lower subscriptions as the company could not get growth capital for the subscription.
Reports suggest that after the reduction of issue expenses, all the money was received by selling shareholders.
KRChoksey Research said that the stock of Sapphire Foods was decently priced, being offered at a ” market cap to sales ratio of 6.78x to its FY21 sales. ” If one looks at the fact that the sales got impacted due to the coronavirus lockdown in FY21, the pricing of the stocks was more lucrative.
For the unversed, Sapphire Foods operated and owned 209 KFC restaurants in India and the Maldives, two Taco Bell restaurants in Sri Lanka as of June 2021, along with Pizza Hut restaurants in Sri Lanka, Maldives and India numbering a total of 239 outlets.
The company had registered losses in the previous three financial years but managed to narrow its consolidated loss in the quarter ending June 2021 Rs 26.4 crore in the quarter.