Acquisition of Sky Gate Hospitality Private Limited along with its subsidiaries
Awaiting price reaction for this filing.
Devyani International's board approved acquiring up to 80.72% equity stake in Sky Gate Hospitality, which owns brands like Biryani By Kilo, Goila Butter Chicken, and The Bhojan, and operates 100+ outlets across 40+ cities. The implied equity value of Sky Gate is ~INR 519 crore, with the 80.72% stake costing ~INR 419.31 crore. Part of the consideration (~INR 419.31 crore) will be paid by issuing 2.37 crore new Devyani equity shares at INR 176.78 each to the sellers, while the balance will be paid in cash. Sky Gate reported consolidated turnover of ~INR 277 crore in FY25 (up from INR 218 crore in FY23). Post acquisition, Sky Gate will become a subsidiary of Devyani. An EGM is scheduled for May 17, 2025 to seek shareholder approval for the preferential share issuance.
This acquisition expands Devyani's food portfolio into the biryani and premium dine-in segments, adding scale and brand diversity. However, it involves a significant share dilution (~2.37 crore new shares) for existing shareholders, which may weigh on short-term stock sentiment pending the EGM approval.