Temasek-backed India QSR chain, Nirma’s cement arm get IPO nod

 Temasek-backed India QSR chain, Nirma’s cement arm get IPO nod

Devyani International Ltd, the operator of KFC and Pizza Hut chains in India, and detergent maker Nirma’s cement arm have received a green signal from the capital markets regulator Securities and Exchange Board of India to float their public issues.

Devyani had filed its draft prospectus to raise Rs 400 crore in a fresh issue and offer 125.33 million shares in a secondary sale by Singapore state investment firm Temasek two months ago.

The Delhi-based franchisee of Pizza Hut, KFC and Costa Coffee in India is promoted by Ravikant Jaipuria-led RJ Corp, which also owns Varun Beverages. RJ Corp took Varun Beverages public in October 2016. Varun is among PepsiCo’s top three global bottlers.

Devyani International’s IPO size is pegged at Rs 1,450-1,500 crore, two people aware of the development previously told The Capital Quest.

Temasek is selling a little more than one-third of its 14.05% stake in the proposed IPO and is looking at a neat profit on its investment.

Kotak Mahindra Capital, CLSA India, Edelweiss Financial Services, and Motilal Oswal Investment Advisors are the merchant bankers managing Devyani International’s IPO.

Devyani International operates a total of 665 fast-food outlets across 155 Indian cities. It claims to be the largest franchisee of Yum! Brands Inc. as of March 2021. Besides KFC, Pizza Hut, and Costa Coffee, Devyani also operates stores of its own food and beverages brands Vaango and Food Street. However, the three core brands contribute more than 90% of its overall revenue.

Nuvoco Vistas

Nuvoco Vistas Corporation Ltd, India’s fifth-largest cement maker by capacity, is looking to raise Rs 5,000 crore (about $670 million at current exchange rates) through the IPO. The company, part of billionaire CR Karsanbhai Patel-led Nirma Group, had also filed its draft prospectus two months ago.

Nuvoco aims to raise Rs 1,500 crore in fresh capital while its promoter group entity Niyogi Enterprises Pvt. Ltd plans to mop up Rs 3,500 crore through a secondary sale in the offering.

A successful IPO will see Nuvoco become the first Indian cement company in over 13 years to list its shares on the exchanges. It will join listed peers Ultratech Cement Ltd, Shree Cement Ltd, Ambuja Cement Ltd, and ACC Ltd.

Nuvoco was incorporated in February 1999 and is promoted by Patel. Nirma Group is a diversified conglomerate that makes chemicals, detergents, soaps and healthcare products, and also engages in real estate development.

The company entered the cement business in 2014 through a greenfield cement plant in Nimbol. Two years later, it outclassed the Piramal Group and JSW Group to acquire the Indian cement assets of LafargeHolcim for $1.4 billion.

Last year, it acquired the cement business of Emami Group for $770 million and renamed the business NU Vista Ltd before consolidating subsidiary firms under its roof into one entity.

Nuvoco, which sells cement, ready-mixed concrete and building materials, operates 11 cement plants across the country with an installed capacity of 22.32 million tonnes per annum as of December 2020. It operates 49 ready-mix concrete plants across the country as of March 2021.

ICICI Securities, Axis Capital, HSBC Securities and Capital Markets (India), JP Morgan India, and SBI Capital Markets are merchant bankers arranging and managing the share sale.

Vivek Sinha

The Capital Quest