Devyani International, the largest franchisee of Yum brands in India, made its debut in the stock markets on August 16. It is one of the leading operators of quick-service restaurants chain in India and has about 655 stores across 155 cities of the country. Devyani International's Rs 1,838 crore IPO started public subscription on August 4 and closed on the 6th of August. It was subscribed impressively about 117 times on its closing day.
The director of Devyani International is Virag Joshi, and it was established in 1991. It is one of the biggest quick-service restaurant chains in India. Monday saw the stock listing of the shares in the exchanges market. The stocks have already been allotted, and the refund has started for oversubscribed shares. Big players have shared positive feedback for the company's IPO and predict significant gains for investors as Devyani has high growth potential. Devyani International Limited, the associate company of RJ Corp, the bottling partner for Pepsico, intends to explore and excel in India's Food and Beverages sector.
GMP and its Predictions
GMP is a trading process that lists the company's shares that is yet to open on the national stock exchange. It is done as speculation over the company's position; however, the trade is binding. GMP stands for Gray Market Premium and is also used for stocks that have been suspended from official trading; hence it is unofficial but legal.
GMP for Devyani's shares is standing at Rs 145, which is a 60% premium over the issue price of Rs.90 per share. Analysts expect this over 50 percent gain during the listing, looking at its reach and position compared to its peers. It is expected to collect a good return on equity and operate at its best capacity in the coming future.
What's in it for Investors?
Devyani International received an oversubscription of its shares when it went public because of its versatility. With an omnipresence of retail operations, it has a niche in the market, and investors are eager to be associated with it over its expansion plans. The company's partnership with famous global brands like KFC, Pizza Hut, Costa Coffee makes it famous across all age groups and gives hope of a powerful listing. Devyani International had finalized the IPO share allotment on August 13, and investors who had subscribed can check their status through direct links of BSE and NSE.
The company has a huge prospect for growth in India, where culturally inspired taste and preference can mold the company's future. The decision of an IPO came amidst the grand IPO openings of other food chains such as Burger King and Mrs. Bector's Food Specialties. The gray market premium has raised the bar of a super-strong listing of its shares and gets a better return on equity with long-term gains than peer industries.
The Food Ranger
Yum Brands is the highest investor of Devyani International as the latter operates the core companies of the former in India. However, Devyani also has some indigenous food ranges like Food Street, Amreli, and Vaango. The listing can break open a door of opportunities since the food market is always booming. Also, the QSR(quick-service restaurants) boom post normalcy will contribute towards better revenue and long-term growth.
The Statistics Looking Forward
In FY 2021, Devyani had suffered a loss of Rs 62.98 crores which were down from a loss of Rs 121.42 crores in FY 2020 due to Covid challenges. However, with the rollout of vaccinations and the economy gaining its pace, it is ready to close the gaps and enhance business. The majority of the industry thrives on the global brands’ revenue; however, with the IPO raised amount, the company can invest in R&D and expand the business of its indigenous inventions.
The future looks beaming for the company amid high valuation and unending scope. In this IPO rush in 2021, what's most important is the persistence to maintain the standard and receive a perfect valuation by delivering excellent service and investing in research and technology.
It's time to wait and watch how the company flares in the listing and how effective the analysts' predictions are. The examples set by companies like Devyani are working well to grow the business market immensely. In no time, India will flourish as the superfood market worldwide, leading other brands and opening franchises, maybe! Let's be optimistic!
We at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.