Preferential Issue
Awaiting price reaction for this filing.
Devyani International's board approved acquiring up to 80.72% in Sky Gate Hospitality, which owns brands like 'Biryani By Kilo', 'Goila Butter Chicken' and 'The Bhojan' and runs 100+ outlets across 40+ cities. The implied equity value of Sky Gate is around INR 519 crore, with the 80.72% stake valued at roughly INR 419.6 crore. To pay part of the purchase price, the company will issue up to 2,37,19,187 equity shares at INR 176.78 each (a premium of INR 175.78 over face value of INR 1), totaling about INR 419.31 crore, on a preferential basis to the sellers. The balance will be paid in cash, with a contingent consideration linked to the future sale of two smaller brands. Sky Gate reported consolidated revenue of about INR 277 crore in FY25 (unaudited), up from INR 268 crore in FY24. An EGM is scheduled for May 17, 2025 to seek shareholder approval for the preferential issue.
Existing shareholders will see dilution of around 2.37 crore new shares issued to the sellers, but the deal adds growing food brands (Biryani By Kilo is a strong, fast-growing chain) to Devyani's portfolio, likely viewed positively by the market if execution and integration go well. Shareholder approval at the May 17 EGM is a key near-term milestone to watch.