Devyani International shares jumped as much as 4.02% to ₹155.36 during Thursday's trading session after the company announced a key update to its proposed merger with Sapphire Foods India. As per The Economic Times, the positive market reaction reflects investor confidence in the revised merger scheme and the removal of the secondary sale condition that had previously been a concern for the merger's completion. The stock's 14-day RSI stands at 71.8, placing it in the overbought zone, indicating potential near-term profit booking after the recent sharp rally, though the broader technical setup remains bullish with the stock trading above all eight key Simple Moving Averages.
Devyani International and Sapphire Foods India have revised their proposed merger scheme following the termination of a planned secondary share sale involving Sapphire Foods Mauritius Ltd (SFML) and Arctic International Pvt Ltd. According to The Economic Times, under the original plan, SFML was to sell 5.95 crore shares, representing around 18.5% of Sapphire Foods' paid-up equity capital, to Arctic International. However, the parties have now mutually terminated the share purchase agreement following commercial discussions, with the proposed secondary transaction no longer taking place. The Scheme of Arrangement between Devyani International and Sapphire Foods India remains on track, and SFML will now receive shares of Devyani International under the merger scheme on the same basis as other Sapphire Foods shareholders. The board has approved an amended scheme of arrangement and a restated merger framework agreement that remove the secondary sale as a condition precedent, allowing the merger process to continue in the ordinary course, subject to regulatory approvals.
Following the revised scheme, the promoter and promoter group's holding is expected to stand at 41.99%, compared with 61.37% before the scheme, while public shareholders' stake is projected to rise to 58.01% from 38.63%. As per The Economic Times, the total outstanding equity shares of Devyani International are expected to increase from around 123.29 crore shares to 180.17 crore shares following the merger. The company clarified that the share-swap ratio and other key terms of the merger remain unchanged, with Sapphire Foods India set to receive 177 Devyani International shares for every 100 Sapphire Foods shares held. The revised structure ensures that SFML will receive shares of Devyani International under the scheme of arrangement on par with other shareholders, maintaining the original merger framework despite the changed ownership dynamics.
The proposed merger scheme will see Devyani International absorbing the businesses of Sapphire Foods India, creating a single unified Yum! India franchise for KFC and Pizza Hut. As per The Economic Times, Devyani International is one of the leading QSR operators and is the largest franchisee for Yum Brands' QSR chains - KFC and Pizza Hut in India. The company also operates as the sole franchisee for Costa Coffee, Tea Live, New York Fries and Sanook Kitchen in India, and owns the South Indian vegetarian food QSR chain Vaango. It had last year acquired Sky Gate Hospitality, which owns brands such as Biryani By Kilo and Goila Butter Chicken. For the June quarter (Q1 FY27), the company had reported a multifold jump in net profit at ₹17.1 crore, with revenue from operations growing by 16.47% year-on-year to ₹1,580.51 crore in the quarter. The merger, once completed, is expected to create a larger listed QSR platform with an expanded shareholder base in India's competitive quick-service restaurant space.
