Sapphire Foods India Limited IPO

 

About Sapphire Foods IPO

Sapphire Foods is India’s leading restaurant operator. It was incorporated in 2009 as Samarjit Private Limited and was later renamed Sapphire Foods. In terms of earnings, in the fiscal year 2020, Sapphire Foods is the largest franchisee operator of YUM! Brands in the Indian subcontinent. This omnichannel restaurant operator enjoys a global presence and operates in countries such as India, Sri Lanka, and the Maldives. To further boost its brand image and expand its business, Sapphire Foods intends to float its shares in the stock exchanges.

Sapphire Foods IPO Objectives

- To avail the benefits of getting listed on stock exchanges.
- To create a public market for Sapphire shares.
- Brand promotion.

Sapphire Foods IPO - Details

Sapphire Foods initial public offer will be a pure offer for the sale of its equity shares by shareholders and promoters. As per DRHP, Sapphire Foods Mauritius Ltd. plans to disinvest 55.69 lakh equity shares, Amethyst will sell 39.62 lakh equity shares, and QSR Management Trust plans to offload 8.50 lakh equity shares. Additionally, WWD Ruby Ltd will disinvest 48.46 lakh equity shares, AAJV Investment Trust 80,169 shares, and Edelweiss Crossover Opportunities Fund and Edelweiss Crossover Opportunities Fund-Series II will sell 16.15 lakh equity shares and 6.46 lakh equity shares, respectively.

Opening Date: Nov 9, 2021

Closing Date: Nov 11, 2021

Price Band: ₹ 1120 to ₹ 1180 per equity share

Issue Size: ₹ 2,073.25 Cr

Face Value: ₹ 10 per equity share

Market Lot: 12 shares

Listing at NSE, BSE

Sapphire Foods IPO Important Dates

IPO Open Date	Nov 9, 2021
IPO Close Date	Nov 11, 2021
Basis Of Allotment Date	Nov 16, 2021
Initiation Of Refunds	Nov 17, 2021
Credit Of Shares To Demat ACcount	Nov 18, 2021
IPO Listing Date	Nov 22, 2021

Why Should You Invest in Sapphire Foods IPO?

Several key drivers make Sapphire Foods’ public offering a lucrative opportunity for investors. For instance, its strong financial standing and diversified global presence continue to add value to its moat. Additionally, the experienced management team coupled with the execution of smart business strategies offers Sapphire Foods an edge over its competitors. In general, Sapphire Foods is among the market leaders when it comes to the restaurant operator space. Investors willing to speculate on the growth and prospect of the food and restaurant business may consider Sapphire Foods a lucrative bet.

Financial highlights

Financial Year	Total Assets In Millions	Total Revenue In Millions	Total Expenses In Millions	Profit After Tax In Millions
March 2021	13,489.37	10,812.35	11,799.29	(998.97)
March 2020	13,806.64	13,517.36	14,183.28	(1,592.47)

How to apply for Sapphire Foods IPO?

You can apply for the Sapphire Foods IPO in these ways:

UPI
Link your bank account to a reliable UPI ID and register it with your Angel One account. Proceed to book Sapphire Foods IPO shares using the ID, confirm the payment on the UPI app, and block the amount for allotment.

Demat Account

1. If you are already a client of Angel One, apply directly for Sapphire Foods IPO, click here.
2. If you’re a new investor open demat account for free with Angel One using link https://tinyurl.com/k79bdf4z to begin your investment journey.

Sapphire Foods IPO - Noteworthy Highlights

Sapphire Foods aims to be the finest restaurant operator in the country, extending great value and experience to its customers. Here are other key highlights of Sapphire Foods:

● It operates 204 KFC outlets in India and Maldives.

● There are 231 Pizza Hut outlets in India, Maldives, and India.

● It operates 2 Taco Bells in Sri Lanka.

● Sapphire Foods enjoys a substantial market presence courtesy of the leading QSR brands under its umbrella.

Sapphire Foods IPO - SWOT Analysis

Strengths

• Experienced promoters: The company’s promoters have years of experience in the industry and boast of a proficient team. Collectively, they help the company draw effective strategies and operational plans.
• Brand presence: As discussed, Sapphire Foods enjoys a robust brand presence in the food and restaurant business. It hosts brand names such as KFC, Taco Bell, and Pizza Hut under its banner. This helps the company generate returns by leveraging the success and popularity of the restaurant chains under its name.
• Geographically diversified presence: Sapphire Foods enjoys a global presence. Its operations are mostly active in regions of Sri Lanka, Maldives, and India. So, even when business is slower in one part of the world, the company continues to generate earnings from the other regions. The same logic is also applicable to its variety of restaurant chain outlets under its name.
• Robust financial standing: Sapphire Foods has a robust financial standing. The company’s financial profile is characterised by substantial revenue growth, low working capital requirements, and convenient capitalisation.
• Scalable business model: The company follows a scalable, pro-expansion business model.

Weaknesses

• Success depends on brands’ popularity: KFC, Pizza Hut, and Taco Bell are some of the most popular global food chains that come under the umbrella of this company. While the popular brands draw in the most revenue, it also makes this company over-dependent on the success of the brands under its banner.
• Exposure to project execution risk: Sapphire Foods intends to grow its geographical presence. However, to increase its store count, the company needs to have access to a suitable location. Additionally, it needs timely access to capital to execute the same. Often gaining access to these makes it challenging for Sapphire Foods to undertake a new project and execute it as per plan.

Opportunities

• Growth and expansion: With enhanced earnings and better financial standing, Sapphire Foods could help executive expansion plans effectively. The company could emerge successful in adding restaurant chains in newer locations down the road.
• Inclusion of new brand: By adding more international restaurant brands under its umbrella, Sapphire Foods can expand its brand value and channels of earnings. Also, by initiating ventures in other countries, it could increase its market presence and customer base.

Threats

• Increased competition: This company is exposed to intense competition from organised and unorganised players such as Burger King, Dominos, and McDonald’s. In such a set up maintaining sustainable growth and increasing profit margin is immensely challenging.
• Inherent industry risk: A large share of the company's revenue comes from KFC. However, its sales are often influenced by external factors such as the supply of chicken or outbreaks of diseases like bird flu. Also, recently with the outbreak of a pandemic, the food and dining sector suffered heavily. As a result, the revenue-generating capability of Sapphire Foods also suffered. This indicates that inherent industry risks and uncontrollable situations make this company susceptible to staggering returns.