Devyani International Limited has issued a postal ballot notice seeking shareholder approval for shifting its registered office from the National Capital Territory of Delhi to the State of Haryana. The company announced this corporate restructuring initiative through a regulatory filing dated January 7, 2026.

Board Approval and Strategic Rationale

The Board of Directors approved the registered office shift proposal during their meeting held on January 1, 2026. The company's current registered office is located at F-2/7, Okhla Industrial Area, Phase-I, New Delhi – 110020, while its day-to-day operations are conducted from the corporate office situated at Plot No. 18, Sector-35, Industrial Estate, Gurugram- 122004 in Haryana.

The strategic move aims to achieve better administrative and economic control while enabling the company to rationalize and streamline its operations. Additionally, RJ Corp Limited, the holding company, and other group companies primarily operate from Gurugram, Haryana, making this consolidation operationally beneficial.

Postal Ballot Process and Timeline

The company has structured the approval process through remote e-voting exclusively, in compliance with regulatory guidelines. Key details of the voting process include:

The postal ballot notice, dated January 5, 2026, will be sent electronically to all shareholders whose email addresses are registered with the company, Registrar and Share Transfer Agent, or Depository Participants as of the cut-off date.

Regulatory Compliance and Approvals

The proposed registered office shift requires multiple levels of approval under the Companies Act, 2013. The resolution falls under Sections 12, 13, and 110 of the Act, necessitating:

• Shareholder approval through special resolution via postal ballot
• Central Government approval (delegated to Regional Director)
• Consequential amendment to Clause II of the Memorandum of Association

The company has appointed Mr. Neeraj Arora, Company Secretary (CP No. 16186), or alternatively Mr. Kapil Dev Taneja (CP No. 22944) from M/s Sanjay Grover & Associates as Scrutinizer for conducting the postal ballot process.

Operational Benefits and Impact

The management believes this registered office shift will be beneficial for the company, shareholders, and all stakeholders without being detrimental to public, shareholder, creditor, or employee interests. The consolidation aligns with the company's operational footprint, as the corporate office and holding company operations are already based in Haryana.

Upon successful completion of the voting process and regulatory approvals, the existing Clause II of the Memorandum of Association will be substituted to reflect: "The registered office of the Company will be situated in the State of Haryana." The results, along with the Scrutinizer's report, will be communicated to stock exchanges and made available on the company's website and NSDL platform.

The proposed merger between Devyani International and Sapphire Foods has received positive analyst coverage, with leading brokerages highlighting the strategic benefits and Pizza Hut's turnaround potential. The merger will create India's largest food and beverage company with an expected turnover of approximately ₹8,000 crore, combining major international quick service restaurant brands under unified operations.

Brokerage Ratings and Target Prices

Macquarie has reiterated an Outperform rating on Devyani with an unchanged target price of ₹200, while Goldman Sachs maintains a Buy rating with a 12-month target price of ₹170. The broader analyst community shows strong support, with 17 out of 26 analysts tracked by Bloomberg maintaining 'buy' recommendations, indicating a potential upside of 26.25%.

Pizza Hut Turnaround Strategy

A central element of the investment thesis focuses on Pizza Hut's margin improvement trajectory. Management guidance indicates low double-digit margins in the near term, with longer-term ambitions to converge towards KFC's mid-teen margin profile of 16-19%. Goldman Sachs expects Pizza Hut to turn contribution-margin positive in the first year post-merger, supported by royalty waivers and the ability to shut unprofitable outlets.

Synergy Benefits and Timeline

Macquarie estimates synergy benefits of ₹2.10-2.25 billion, net of capability-building costs. The brokerage projects approximately 60% of these benefits will accrue in the first year after merger completion, with full benefits realized by the second year. Key strategic shifts include moving supply chain, technology, innovation, and marketing functions in-house from Yum, with capabilities expected to be fully developed by mid-2026.

Merger Structure and Financial Terms

The merger will be executed through a share swap arrangement with a ratio of 177 Devyani shares for every 100 Sapphire shares. The deal includes a floor price of ₹280 per share and a one-time payment of ₹320 crore to Yum. Additionally, the structure features a 10-year reduction in Pizza Hut royalty and a planned sale of 18.5% of Sapphire promoter stake to meet Yum's promoter holding requirements.

Technology Integration and Market Position

The companies will operate on a unified technology stack post-merger, with KFC systems transitioning to Devyani's existing platform. Goldman Sachs highlighted potential upside at KFC, where technology and supply chain control transition could support same-store sales growth, particularly in the delivery channel that accounts for 40-45% of sales. The merger completion is projected within 13-18 months of signing the agreement.

While both brokerages remain optimistic about execution and synergy visibility, they emphasize that sustained consumer demand recovery will be critical for store expansion and earnings momentum in the competitive quick service restaurant sector.