The Rs 2,073 crore IPO of the company, which operates KFC, Pizza Hut and Taco Bell chain in India, Sri Lanka and Maldives, received bids for 67,88,580 equity shares till 12.25 pm on Day 2 on Wednesday against the total issue size of 96,63,468 equity shares. This translates into a subscription of 70 per cent.
The portion reserved for retail investors was subscribed 3.7 times, whereas the non-institutional investors’ quota received only eight per cent bids. Institutional buyers’ allocation was subscribed two per cent thus far, the data from BSE suggested.
The primary offering is entirely an offer for sale (OFS), in which its existing shareholders and promoters are offloading 17,569,941 equity shares in the range of Rs 1,120-1,180 each.
A day before the IPO, Sapphire Foods India raised about Rs 933 crore from anchor investors, who were allotted 7,906,473 equity shares at the upper price band of Rs 1,180 per share.
Total 53 anchor investors including the Government of Singapore, Fidelity Funds, Abu Dhabi Investment Authority, Ashoka India Opportunities Fund, Sundaram Mutual Funds, ICICI Prudential Life Insurance, Bajaj Allianz Life Insurance Company and HDFC Mutual Funds among others participated in the anchor allotment.
Despite reporting losses for the last few years, analysts are suggesting investors to subscribe to the issue. They are bullish on the prospects of the company and competitive valuations, which leaves some value on the table for investors.
Fast food culture under QSR is expected to flourish in India due to an increase in the working-class population and continued urbanization, said Reliance Securities in its pre IPO note. The brokerage has given it a ‘subscribe’ rating for the long term.
“QSR business model is quite impressive, as each restaurant franchise starts generating significant RoE at the restaurant level, once it reaches a utilization level of more than 90 per cent, which bodes well for the long-term investors,” it added.
