Trending IPO listings: Sapphire Foods makes a modest debut

The stock price closed at a 3% premium to its issue price

This franchise operator for YUM’s, Sapphire Foods Ltd, got listed on the exchanges on 18 November 2021. As we are all aware, apart from Diwali, investors have celebrated the IPO festival. The markets witnessed some firecrackers such as Nykaa bursting with listing gains, and some heavy firecrackers that didn’t light up at all to the expectations of investors - a prime example being Paytm.

Sapphire Foods, however, had a modest opening. The stock had a decent opening with a 15% premium at Rs 1360.75 on the BSE and Rs 1368 on the NSE. At the end of the day, the stock price closed at Rs 1216.05, down by 7.24% from its opening price and up by 3% from its issue price.

The company had a decent response from the public for subscription as the stock was subscribed 6.62x on the final day of bidding. The company had come out with its initial public offering (IPO) of equity shares of the face value of Rs 10 per equity share. The maiden offer comprised an offer for sale of shares worth Rs 2,073.25 crore by the promoters. The upper price band of the issue was fixed at Rs 1180 per equity share.

Sapphire Foods India is YUM brand's largest franchise operator in the Indian subcontinent in terms of revenue as of FY'20 operating KFC, Pizza Hut and Taco Bell restaurants. It is also Sri Lanka's largest international QSR chain in terms of revenue for FY' 2021 and the number of restaurants operated as of March 31, 2021.

The company is in the expansion phase and so the profitability has been deprived of the income statement. It has been suffering net losses for the past years. Although the top line of the company has been on a downtrend, part of the reason was the pandemic. It would be crucial to see how the QSR chain performs as a listed company.