Sapphire Foods India makes decent debut on stock market. Check details

The operator of KFC and Pizza Hut, Sapphire Foods India Limited, made a decent debut on the stock market as it listed at a 15 per cent premium on the stock exchanges. Analysts had earlier expected a similar listing for the stock.


The shares of Sapphire Foods listed at Rs 1,360.75 on the Bombay Stock Exchange (BSE) and Rs 1,368 on the National Stock Exchange (NSE). The share of the company were trading nearly 6 per cent higher on the BSE and NSE at around 1:20 pm, maintaining a steady momentum.

Sapphire Foods India's IPO received a strong response from investors as it was subscribed 6.62 times during November 9-11. The portion reserved for qualified institutional buyers was booked 7.5 times while the quota reserved for non-institutional investors saw 3.46 times subscription. Meanwhile, the portion for retail investors was subscribed 8.7 times.

It is worth mentioning that the company raised Rs 2,073 crore through its IPO and it was 2.57 an offer for sale (OFS) by shareholders and promoters. As of June 2021, Sapphire Foods operated over 200 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and two Taco Bell restaurants in Sri Lanka.

The company had posted financial losses in the past three fiscal years and the consolidated loss in FY21 was Rs 99.89 crore, compared to Rs 159.24 crore in FY20. Consolidated revenue during FY21 also dropped to Rs 1,019.62 crore from Rs 1,340.41 crore due to Covid-led lockdown pressure.

The KFC operator had posted losses in all three previous financial years mentioned in the prospectus. The consolidated loss in the financial year FY21 was Rs 99.89 crore, against loss of Rs 159.24 crore in FY20. Consolidated revenue during FY21 dropped to Rs 1,019.62 crore from Rs 1,340.41 crore due to the Covid-19 pandemic.

However, the company did manage to reduce its consolidated loss to Rs 26.4 crore in the June quarter, compared to Rs 75.17 crore in the corresponding period last year. The company’s revenue also increased to Rs 303.05 crore from Rs 110.99 crore year-on-year in the same period.

A majority of analysts recommended investors to subscribe to the issue even though it is a loss making entity. This is due to the growth in the quick service restaurant (QSR) chain due to economic recovery.