Devyani International , a major player in the Indian food and beverage industry, has announced plans to bolster its position in the fast-growing biryani market. The company is set to increase its stake in Sky Gate Hospitality, the parent company of popular biryani chain Biryani By Kilo.

Stake Increase Details

Transaction Structure

The stake increase will be executed through a two-pronged approach:

1. Subscription to New Equity Shares: Devyani International will invest in newly issued equity shares of Sky Gate Hospitality.
2. Purchase from Promoter Group: The company will also acquire shares from the existing promoter group.

Timeline

The transaction is expected to be completed by July 31, 2025, giving Devyani International a significant timeframe to execute this strategic move.

Strategic Implications

This move by Devyani International signifies its commitment to strengthening its position in the biryani segment, which has seen robust growth in recent years. Biryani By Kilo, known for its authentic and high-quality biryani offerings, has established itself as a prominent player in the organized biryani market.

The increased stake is likely to give Devyani International greater control over Sky Gate Hospitality's operations and strategy, potentially leading to synergies between its existing portfolio of brands and Biryani By Kilo.

Market Impact

The announcement underscores the growing importance of the biryani segment in India's food service industry. As Devyani International deepens its involvement in this space, it may lead to increased competition and innovation in the biryani market.

Investors and industry observers will be keenly watching how this increased stake translates into growth and profitability for Devyani International in the coming years.

Devyani International , a prominent player in the food and beverage industry, has made a strategic move to strengthen its position in the market. The company has announced plans to increase its stake in Sky Gate Hospitality from 80.72% to 86.13% through a ₹106.25 crore investment.

Key Highlights

• Devyani International will invest ₹106.25 crore to acquire additional equity in Sky Gate Hospitality.
• The company's stake in Sky Gate Hospitality will increase from 80.72% to 86.13%.
• This move represents a 5.41 percentage point increase in Devyani International's ownership of Sky Gate Hospitality.
• The acquisition will be completed by July 31, 2025, via cash consideration in one or more tranches.
• Sky Gate Hospitality owns popular brands like 'Biryani By Kilo' and 'Goila Butter Chicken'.

Strategic Implications

The increased stake in Sky Gate Hospitality underscores Devyani International's commitment to expanding its presence in the hospitality sector. By consolidating its ownership, the company is likely aiming to enhance its control over Sky Gate Hospitality's operations and strategic direction.

Financial Investment

The ₹106.25 crore investment by Devyani International demonstrates the company's confidence in Sky Gate Hospitality's potential and its willingness to allocate significant capital to strengthen its portfolio. This move could potentially lead to improved synergies and operational efficiencies between the two entities.

Market Position

As Devyani International increases its hold over Sky Gate Hospitality, it may be better positioned to leverage the subsidiary's assets and capabilities. This could potentially result in enhanced market competitiveness and the ability to capitalize on growth opportunities in the hospitality sector, particularly in the popular biryani and butter chicken segments.

Long-term Strategy

The acquisition of additional equity in Sky Gate Hospitality aligns with Devyani International's broader strategy of strengthening its market position and expanding its footprint in the food and beverage industry. The investment aims to strengthen operations and support further investments in subsidiaries, indicating a long-term commitment to growth and expansion.

Stakeholders will be watching closely to see how this increased stake translates into value creation for Devyani International in the coming years, as the acquisition process unfolds over the next two years.