Sapphire Foods to Merge With Devyani International in Share-Swap Deal, Creating Unified Yum! India Franchisee

Boards Approve Strategic Consolidation of Leading QSR Operators​

Sapphire Foods India Ltd and Devyani International Ltd have approved a scheme of arrangement to merge Sapphire Foods with and into Devyani International through a share-swap arrangement. The decision was cleared by the boards of both companies at their respective meetings held on Thursday, marking a major consolidation in India’s quick service restaurant sector.

The transaction will result in the formation of a single unified Yum! India franchisee for KFC and Pizza Hut, bringing together the operations of two of the largest franchise partners of Yum! Brands in the country.

Share-Swap Ratio and Transaction Structure​

Under the approved scheme, Devyani International will issue 177 equity shares for every 100 equity shares held in Sapphire Foods. In addition, Arctic International, a group company of Devyani International, will acquire around 18.5 percent of Sapphire Foods’ paid-up equity share capital from the existing promoters, with an option to assign this stake to a mutually agreed financial investor.

Yum! Brands has granted its approval for the proposed consolidation.

Regulatory Approvals and Timeline​

The merger is subject to receipt of all customary statutory and regulatory approvals, including approvals from stock exchanges, competition authorities, tribunals, as well as shareholders and creditors of both companies. The approval process is expected to take approximately 12 to 15 months, after which the merger will become effective.

Upon completion, Devyani International is expected to emerge as one of the largest quick service restaurant operators in India, combining the scale, reach, and operational strengths of both entities.

Expansion of KFC Portfolio and Territory Rights​

As part of the transaction, Devyani International will acquire 19 KFC restaurants currently operated by Yum! India in Hyderabad. These outlets were opened during the initial expansion phase of KFC in India. Devyani International will also pay a one-time charge to Yum! India towards merger approval and the license fee for the additional territory.

Yum! Brands operates multiple QSR brands in India, including KFC, Pizza Hut, and Taco Bell, and also owns global brands such as Habit Burger and Grill.

Synergy Benefits and Growth Outlook​

The proposed merger is expected to deliver significant operational and financial synergies. The combined entity is projected to generate annual synergies of Rs 210 to 225 crore from the second full year of integrated operations. These benefits are expected to arise from economies of scale, a unified brand strategy for KFC and Pizza Hut, integrated technology platforms, and strengthened supply-chain capabilities.

The consolidation will also create one of the largest QSR platforms in India with an expanded national footprint, excluding captive markets.

Management Commentary​

Ravi Jaipuria, Non-Executive Chairman of Devyani International Ltd, said the merger would also strengthen the company’s international presence, particularly in Sri Lanka, complementing its existing overseas operations.

Sumeet Narang, nominee director of Sapphire Foods and founder of Samara Capital, said the transaction brings together a unified franchisee for KFC and Pizza Hut in India, reflecting the shared long-term vision and partnership between Samara Capital Group and RJ Corp.

Ranjith Roy, Chief Financial Officer of Yum! Brands, said both Devyani International and Sapphire Foods have been long-standing partners and that the proposed merger is expected to unlock accelerated growth and enhance supply-chain operations in the region.

Operational Footprint of the Combined Entity​

Devyani International is the largest franchisee for KFC and Pizza Hut in India and is also the sole franchisee for Costa Coffee, Tea Live, New York Fries, and Sanook Kitchen in the country. It additionally owns the South Indian vegetarian QSR chain Vaango.

The company operates across more than 280 cities in India, Nigeria, Nepal, and Thailand as of September 30, 2025. Sapphire Foods, meanwhile, holds franchise rights for KFC outlets across 10 states and Pizza Hut outlets across 11 states, and also operates KFC, Pizza Hut, and Taco Bell restaurants in Sri Lanka through its subsidiaries. Combined, the two companies operate over 1,000 restaurants across India and Sri Lanka.

The merger is positioned as a significant step toward building a scaled, integrated, and growth-focused QSR platform in India and key overseas markets.

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