Devyani International IPO: The menu has Pizza Hut, KFC & Costa Coffee, should you take a bite?

Everyone wants a bite out of the booming IPO market and Devyani International has the operations of Pizza Hut, KFC and Cosa Coffee on the menu. Anchor investors have poured in Rs 825 cr into this issue already but do retail investors need to be vary of this IPO? Here are the details-:

Issue Details

• Date: 4-6 Aug
• Price Band: 86-90/Sh
• Grey Market Premium: 50%
• Marketcap post listing @ 10820 Cr (at upper price band)

About the Company

• Runs 3 core brands for Yum - Pizza Hut, KFC, Costa Coffee
• Derives 90% of the revenues from these 3 brands in India
• Company will be debt free post IPO

Risks & Red Flags

• Loss making company as per last three years of financial reports
• Negative cash flows also a big risk for investors
• Significantly dependent on agreement with Yum Brand, any renegotiation or hurdle would hit revenues significantly

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