Devyani International And Sapphire Foods Merger: Share Swap Ratio Explained For Retail Investors

In one of the first major deals of the year, Devyani International Ltd., a leading quick service restaurant chain in India, has announced its merger with Sapphire Foods Ltd. in order to consolidate two large Yum! Brands franchisees in India.

While the merger could take up to 12-15 months to complete, investors must note that the merger will be done through a share-swap ratio of 177:100.

To understand what a 177:100 share-swap ratio means, it is important to note how the Devyani-Sapphire merger will work.

The current entity—Sapphire Foods India Ltd.—will merge into Devyani International Ltd., which will become the surviving entity.

This combined entity will house the operations of both companies, effectively creating a single, unified franchisee platform for KFC and Pizza Hut in India.

If you currently hold fully paid Sapphire Foods shares, you will automatically receive shares of Devyani International Ltd. based on the approved ratio.

The existing Sapphire Foods shares will be extinguished, and the company will eventually be delisted from the stock exchanges.

If you own 100 shares of Sapphire Foods on the record date, here's what you will receive as a retail investor, 177 shares of Devyani International Ltd.

No extra payment will be required from your end and the transfer will be completely automatic. It will show up in your account once corporate actions are processed.

Once the merger process is approved and completed, your demat account will automatically reflect the change.

• The Sapphire Foods stock will disappear from your holdings.

• Devyani International shares will be credited to your account in the ratio mentioned above.

• The credited stock will trade under the existing Devyani International ticker and market symbol.

However, it must be noted that the companies are yet to announce a specific record date for the final execution of the merger.