Shares of Devyani International Limited (DIL) and Sapphire Foods jumped as much as 9 per cent in trade on Tuesday after the exchanges BSE and NSE granted no objection and no adverse observations to the composite scheme of arrangement between the two companies. Under the scheme, Devyani International will acquire Sapphire Foods, marking a strategic consolidation of the two firms.
Devyani International shares opened with a gain of 2.3 per cent at ₹113.99 and touched a high of ₹121.38, up 9 per cent, on the National Stock Exchange (NSE). Similarly, Sapphire Foods shares opened higher at ₹177.70 and touched an intraday high of 7 per cent at ₹185.58.
Notably, Devyani International has announced via a filing that it has received “observation letters from the NSE and BSE in relation to the proposed Scheme of Arrangement amongst Devyani International Limited (Transferee Company) and Sapphire Foods India Limited (Transferor Company), and their respective shareholders.”
The scheme, however, remains subject to necessary statutory and regulatory approvals and of the respective shareholders and creditors of the companies involved, the filing added. As of 11:45 AM, Devyani International shares were trading 4.1 per cent higher at ₹115.95, while Sapphire Foods shares gained 3.6 per cent to trade at 179.85. Both Devyani International and Sapphire Foods are engaged in the development, management, and operation of Quick Service Restaurants (QSRs). Devyani is the largest franchisee for Yum! Brands (KFC and Pizza Hut) in India. Sapphire Foods’ portfolio includes KFC, Pizza Hut, and Taco Bell. Devyani-Sapphire merger ratio Upon completion, the transaction will result in Devyani International becoming one of the largest QSR operators in India by combining the operations of both companies, positioning the merged entity for the next phase of accelerated growth, scale, and profitability.
The merger will take place through a share-swap mechanism. Under the share swap ratio, 177 equity shares of Devyani International will be issued to the eligible shareholders for every 100 equity share of Sapphire Foods.
Arctic International, an entity associated with the promoter group of DIL, will acquire approximately 18.5 per cent of Sapphire Foods’ paid-up equity share capital from the existing promoters, with an option to assign to a mutually agreed financial investor.
The strategic focus areas of the merged entity will be to accelerate expansion of KFC; strengthen and revitalise Pizza Hut for long-term sustainable growth, and scale growth of Devyani’s emerging brands portfolio.
Devyani International stock: Technical view
Aakash Shah, technical analyst at Choice Broking, said that Devyani International is showing signs of recovery after a prolonged downtrend, currently trading around ₹114.66. The stock has witnessed a bounce from the ₹105 zone, indicating renewed buying interest and the possibility of a short-term base formation.
The stock has moved above its 20-day EMA (₹112.72) and is trading near the 50-day EMA (₹114.01), reflecting improving momentum. A sustained move above these levels could strengthen bullish sentiment further. However, the stock still faces resistance near the 100-day EMA (₹119.02), which remains a crucial hurdle for trend confirmation. On the downside, ₹112 remains an important support zone, while ₹105 should act as a key stop-loss level. “If Devyani sustains above ₹119, it could trigger a fresh rally towards ₹130–137, where the next major resistance lies. Rising volumes and a decisive breakout above the 100-day EMA will be key factors to watch for further upside,” the analyst added.
