The initial public offer (IPO) of Sapphire Foods India, the franchise holder of KFC and Pizza Hut restaurants is subscribed 3.37 times so far on its third and final day of issue, according to subscription data on the stock exchanges. The IPO of the food chain operator opened on Tuesday, November 9 and will close today - remaining open for investors for three days. The company fixed a price band of Rs 1,120 - Rs 1,180 per share for the IPO.
The IPO of over 17.5 million shares is completely an offer for sale (OFS) by the promoters and investors of the company. The IPO proceeds, apart from issue expenses, will go to shareholders who are selling their stakes.
On Thursday, retail individual investors showed maximum interest as the portion reserved for them is subscribed by 7.39 times so far - the highest among the three groups of investors. The portion set aside for qualified institutional buyers or QIB is subscribed 3.40 times, while the portion reserved for non-institutional investors is subscribed 0.66 times, so far.
Sapphire Foods is one of India's largest restaurant franchisee operators and Sri Lanka's largest international QSR chain. As of fiscal 2019-20, Sapphire Foods India is YUM brand's largest franchise operator in the Indian subcontinent in terms of revenue
''At the higher end of the price band, Sapphire Foods IPO is priced at a mcap/sales ratio of 7.4 times on a post-issue fully diluted basis (based on FY21 sales).
This is lower compared to its listed peers Jubilant Foodworks (12.1 times), Burger King (10.27 times) and Devyani International (15.71 times).However, as Jubilant Foodworks has superior profitability and return ratios, it is expected to command a premium valuation.
Given lower profitability, reasonable valuations, and poorer return ratios as compared to its peers, we remain 'Neutral' on the long-term prospects of the issue.
Given a fancy for IPOs in the ongoing season, the company may still see strong subscription numbers. Hence, investors looking for listing gains can subscribe to the issue," SEBI-registered investment advisor INDmoney said in a report.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
