Devyani International has announced board approval for a comprehensive scheme of amalgamation involving three wholly-owned subsidiaries, marking a significant corporate restructuring initiative to streamline operations and enhance business synergies.

Board Approval and Regulatory Disclosure

The Board of Directors approved the merger scheme during their meeting held on March 10, 2026, which commenced at 4:00 PM and concluded at 4:15 PM, based on recommendations from the Audit, Risk Management and Ethics Committee. The scheme involves the amalgamation of Sky Gate Hospitality Private Limited, Blackvelvet Hospitality Private Limited, and Say Chefs Eatery Private Limited with Devyani International Limited.

Financial Profile of Merging Entities

The merger involves entities with varying financial profiles, consolidating operations across different business segments. The financial data as of March 31, 2025, reveals the scale and scope of the consolidation.

Business Operations and Market Presence

Devyani International operates as the largest franchisee of Yum Brands in India, managing over 2,000 stores across more than 280 cities in India, Nigeria, Nepal, and Thailand as of December 31, 2025. The company holds exclusive franchisee rights for Costa Coffee, Tea Live, New York Fries, and Sanook Kitchen in India, while owning brands like Biryani By Kilo, Goila Butter Chicken, and Vaango.

The three subsidiaries being merged operate a combined chain of more than 100 outlets, including dine-in restaurants and cloud kitchens across 40+ cities, with presence in Delhi NCR, Mumbai, Kolkata, and Bengaluru. Sky Gate is among the first to introduce the 'Handi Biryani' concept and deliver freshly prepared biryani.

Strategic Rationale and Regulatory Compliance

The merger aims to achieve better business synergies, optimize resource utilization, reduce operational costs and corporate tiers, while increasing overall efficiency to maximize stakeholder value. Since all transferor companies are wholly-owned subsidiaries, no fresh shares will be issued, and the shareholding pattern remains unchanged.

Under SEBI regulations, the company is not required to obtain 'No Objection Letter' from stock exchanges as the transferor companies are direct and indirect wholly-owned subsidiaries. The scheme requires statutory approvals from shareholders, creditors, the National Company Law Tribunal, and other regulatory authorities as applicable.

Devyani International Limited has completed a strategic acquisition that strengthens its position in the hospitality sector. The company successfully acquired an additional 11.4% equity stake in Sky Gate Hospitality Private Limited for a total consideration of Rs. 57.5 crore, making Sky Gate a wholly-owned subsidiary effective March 7, 2026.

Transaction Structure and Financing

The acquisition was financed through a carefully structured payment mechanism combining equity instruments and cash. Following shareholder approval via postal ballot on March 8, 2026, the company's Share Allotment Committee approved the transaction details on March 9, 2026.

Preference Share Allotment Details

The company allotted 3,00,000 Non-convertible Redeemable Preference Shares of Rs. 1,000 each at par value on a private placement basis. These preference shares were issued to Mr. Kaushik Kumar Roy, promoter and founder of Sky Gate, as partial consideration for the equity stake acquisition. The preference shares represent a significant portion of the total transaction value, accounting for Rs. 30 crore of the Rs. 57.5 crore deal.

Strategic Implications

The completion of this acquisition marks a significant milestone in Devyani International's expansion strategy. Sky Gate Hospitality's transition to wholly-owned subsidiary status provides the company with complete operational control and strategic flexibility. The transaction was initially announced on February 4, 2026, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Corporate Governance and Compliance

The transaction followed proper corporate governance procedures, including:

• Shareholder approval obtained through postal ballot process
• Board committee authorization for share allotment
• Regulatory disclosure compliance under SEBI regulations
• Transparent communication to stock exchanges

The company has fulfilled all regulatory requirements and disclosed the transaction details to both NSE and BSE, ensuring complete transparency with stakeholders and market participants.