Shares of Devyani International that operates quick-service restaurant (QSR) chains like KFC, Pizza Hut and Costa Coffee made a strong debut on the stock market after its initial public offering (IPO).

Devyani International shares got listed on the Bombay Stock Exchange at Rs 141 at a 56.66 per cent premium on the stock issue price of Rs 90. At 1:20 pm, shares of Devyani International fell slightly on the BSE but were still trading at a 38 per cent premium over the issue price.

On the National Stock Exchange (NSE), the scrip got listed at Rs 140.90, up over 56 per cent. However, it dipped to 38 per cent during the afternoon trading session.

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The company’s Rs 1,838-crore IPO opened for subscription on August 4 and closed on August 6. It received a strong response and was subscribed nearly 117 times. The price band for the IPO was fixed at Rs 86-Rs 90.

The quota reserved for qualified institutional buyers (QIBs) was subscribed 95.27 times while the portion for non-institutional investors was subscribed over 213 times. The retail investor quota was subscribed over 39 times.

It may be noted that the IPO comprised a fresh offer of Rs 440 crore and an offer for sale (OFS) of Rs 1,398 crore by investor Dunearn Investments and promoter RJ Corp. The company said it will use the proceeds from the public offering to repay debts besides expenses for general corporate purposes.

Although the company has recorded losses for the last three financial years, brokerages were optimistic ahead of the public issue of Devyani International, which is the largest franchisee of Yum Brands in India.

The company is also among the largest operators of quick-service restaurants (QSRs) in India on a non-exclusive basis. It is worth mentioning that the company operated 696 stores across 166 cities in the country as of June 2021.

Some of the brokerages that have recommended individuals to subscribe to the issue are Reliance Securities and BP Equities. Both brokerages gave a ‘subscribe’ rating based on the future growth potential of the QSR segment in India.