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Informist, Tuesday, Jan. 6, 2026

 

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--Devyani Intl: To have 3,000 stores globally post merger with Sapphire Foods
--CONTEXT: Devyani Intl mgmt comments in joint concall with Sapphire Foods 
--Devyani Intl:See INR 80 bln annual revenue post merger with Sapphire Foods 
--Devyani Intl: Working on creating leadership team of merged entity 
--Devyani Intl: Aim to up Pizza Hut margins to KFC margin levels going ahead 
--Devyani Intl: Aiming calibrated expansion of KFC brand post merger 
--Devyani Intl:Look to bring unified tech strategy for all brands post merger 
--Devyani Intl:Close to finalising global tech partner for unified tech plan 
--Devyani Intl: Approval for merger with Sapphire Foods will take 9-15 mos 
--Devyani Intl: Hope to see all Sapphire Foods synergies by 2 yrs of merger 

 

By Avishek Rakshit & Narayana Krishna

 

KOLKATA/HYDERABAD – The merger of Devyani International Ltd. and Sapphire Foods India Ltd., which will result in a joint entity with over 3,000 outlets globally, may take around 9-15 months, the management of the former said in a conference call with investors Tuesday. Both these companies have already started working on creating a leadership team for the merged entity by shortlisting their best candidates.

 

During the call, a senior official from Devyani International said that both companies have internally discussed the corporate structure of the merged entity and staffing requirements. He added that some candidates have already been hired for various functions under the merged entity, while others are in the pipeline. The structure of the top leadership role is still under discussion, with senior officials from both companies being considered for the top executive role, the official said.

 

"I think as far as the leaders are concerned, we are still about a year away from the merger and there is a lot of work to be done on both sides. So I think we need to sit together and see who is the best in both the teams," the official said. "And then we can choose between the two teams and find the best people to take it forward."

 

Sapphire Foods – one of the franchisees of Yum! Brands in India - announced its merger with Devyani International – another large franchisee of Yum! Brands in India and Nepal, through a share swap agreement. Under this mechanism, 177 equity shares of INR 1 each of Devyani International will be issued to every 100 equity shares of INR 2 each, held by shareholders of Sapphire Foods India. Yum! Brands owns marquee brands like Kentucky Fried Chicken, Pizza Hut, and Taco Bell. As part of the deal, the merged entity will take over key functions from Yum! Brands which will necessitate organisational and structural changes to handle the functions.

 

"Traditionally, we've been operators and we've been executors. As part of the deal, we are going to be taking over some functions for some brands, some functions for other brands," the company official said. "We do recognise that we have to build these capabilities, because in the past, we never used to handle these functions. And hence, while the merger discussions were on, we started to build those capabilities."

 

For the Pizza Hut brand, the merged entity will take over marketing, innovation, technology, and supply chain functions from Yum! Brands in India, and for the popular KFC brand, the merged entity will handle technology and supply chain management. Marketing and innovation functions will continue to be led by Yum! Brands. 

 

Devyani International and Sapphire Foods are close to roping in a global technology company to develop a unified app and technology platform. An official said that while each brand under the merged entity will retain its own distinct look and feel, the overarching technological backbone will be common across all brands and will come under a "unified technology strategy."

 

While an initial maximum synergy benefit of up to INR 2.5 billion is expected following the merger, the full benefits are likely to be realised after two years of the merged operations, the official said.

 

Post the merger, the company will opt for a calibrated expansion of the KFC branded outlets and will strive to improve margins from the Pizza Hut outlet to levels similar to that of KFC, the official said. The annualised revenue of the merged entity will be around INR 80 billion, the official added. 

 

In a filing with the bourses on Jan.1, Sapphire Foods said that the merger is subject to receipt of all the regulatory and statutory approvals, including approvals from the stock exchanges, the Competition Commission of India, the National Company Law Tribunal, and the shareholders and creditors of both the companies.

 

For the September quarter, Sapphire Foods India reported a consolidated net loss of INR 127.7 million on revenues of INR 7.42 billion. Devyani International had reported a consolidated net loss of INR 219 million on revenues of INR 13.77 billion for the quarter ended September. On Tuesday, shares of Sapphire Foods closed 2.7% down at INR 227.80 and those of Devyani International closed 0.94% lower at INR 138.72 on the National Stock Exchange.  End

 

Edited by Tanima Banerjee

 

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