Devyani International Limited has informed the Exchange about Scheme of Arrangement
DEVYANI · price
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Devyani International (DIL) has approved a Scheme of Arrangement to merge Sapphire Foods India Limited (SFIL) into itself, with an appointed date of April 1, 2026. Under the deal, DIL will issue 177 equity shares (Re. 1 each) for every 100 equity shares (Rs. 2 each) of SFIL. Both companies are Yum Brands franchisees (KFC, Pizza Hut, Taco Bell), and the merger will combine KFC and Pizza Hut operations in India under a single entity, with a combined turnover of over Rs. 58,000 million. Separately, DIL and SFIL signed a binding term sheet with Yum India to acquire 19 KFC stores for Rs. 90 crore and pay Rs. 320 crore for additional territory rights. Post-merger, promoter holding will dilute from 61.37% to 47.83%, while public shareholding will rise to 52.17%. The scheme is subject to NCLT, CCI, and shareholder approvals.
This is a major consolidation in India's QSR space, creating the largest KFC and Pizza Hut operator in the country and unlocking cost synergies. SFIL shareholders get a premium exchange ratio, while existing DIL shareholders face promoter dilution of around 13.5% and share issuance to absorb the merger. Near-term stock reaction may be mixed given the dilution, but long-term synergies in scale, margins, and bargaining power could be value-accretive.