Devyani-Sapphire merger set to add spice to QSR competition

The newly announced merger of Sapphire Foods India Ltd (SFIL) with Devyani International Ltd (DIL) will make the latter one of the largest players in the quick-service restaurant (QSR) space.

- AKSHARA SRIVASTAVA

The move will create a unified Yum! India franchise for KFC and Pizza Hut, where SFIL was operating the restaurants in South, while DIL was running shop in North, East and West India. It will also intensify competition between DIL and Jubilant FoodWorks, which operates Domino’s and fried chicken brand Popeyes.

“Post the merger the combined entity will be amongst India’s largest QSR players; it will also be a multi-brand, multi-cuisine and multi-country QSR platform, and will potentially offer superior growth visibility, improved resilience across demand cycles and a structurally stronger business model,” JM Financial said in a note on Friday.

Back-of-the-envelope calculations, which do not bake in the merger, show that the combined equity value could be around ₹387 billion, according to the report.

The proposed merger, subject to approvals, will be carried out through a swap share ratio, where DIL will issue 177 shares for every 100 shares of Sapphire Foods. Arctic International, a group company, is to acquire approximately 18.5 per cent of SFIL paid-up equity share capital from the existing promoters, with an option to assign to a mutually agreed financial investor.

According to latest figures available until September 30 (Q2FY26), Jubilant FoodWorks operates 2,450 stores in the country, including 2,321 Domino’s stores. Meanwhile, DIL operated 1,802 stores until the same time and Sapphire Foods operated 997 stores.

As part of the acquisition, DIL will also acquire 19 KFC restaurants in Hyderabad currently operated by Yum! India, effectively taking its total store count to 2,818.