Sapphire Foods India Limited, the operator of KFC and Pizza Hut, made a good start in the stock market as it is listed at a premium of 15 per cent on the stock exchanges. Analysts had previously expected a similar listing for the stock.
Shares of Neelam Foods were listed at Rs 1,360.75 on the Bombay Stock Exchange (BSE) and Rs 1,368 on the National Stock Exchange (NSE). The company’s stock was trading at around 1:20 pm on BSE and NSE with a gain of about 6 per cent.
The IPO of Sapphire Foods India 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 subscriptions of 3.46 times. Meanwhile, the share of retail investors was subscribed 8.7 times.
Significantly, the company had raised Rs 2,073 crore through its IPO and it was 2.57 offers for sale (OFS) from shareholders and promoters. As of June 2021, Sapphire Foods operates 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 reported financial loss in the last three financial years and the consolidated loss in FY 2011 was Rs 99.89 crore, as against Rs 159.24 crore in FY 2010. Consolidated revenue during FY2011 also declined to Rs 1019.62 crore from Rs 1,340.41 crore due to the covid-led lockdown pressure.
The KFC operator had posted losses in all the three financial years mentioned in the prospectus. The consolidated loss in FY 2011 was Rs 99.89 crore, while in FY 2010 there was a loss of Rs 159.24 crore. Consolidated revenue during FY2011 declined to Rs 1019.62 crore from Rs 1,340.41 crore due to the Covid-19 pandemic.
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However, the company managed to reduce its consolidated loss to Rs 26.4 crore for the June quarter, from Rs 75.17 crore in the same period last year. The company’s revenue also increased to Rs 303.05 crore from Rs 110.99 crore on a year-on-year basis in the same period.
Most of the analysts recommend investors to subscribe to the issue even though it is a loss-making entity. This is due to the growth in quick service restaurant (QSR) chains due to economic recovery.