New Delhi: Sapphire Foods India and Devyani International Ltd (DIL), the two leading operators of the KFC and Pizza Hut brands, are set to merge, creating
a fast-food giant with over 3,000 stores. The boards of Devyani International Ltd (DIL) and Sapphire Foods India Ltd (SFIL), the two leading franchise operators of Yum! Brands, at their respective meetings held on Thursday, approved a scheme of arrangement for the merger, which will have a combined turnover of nearly Rs 8,000 crore.
As per the scheme of arrangement, SFIL will merge with DIL, an RJ Corp firm promoted by the Jaipuria family. The combined entity will have operations in markets such as India, Nigeria, Nepal, Thailand and Sri Lanka. Besides Yum! Brands like KFC, Pizza Hut, and Taco Bell, the combined entity will also hold licenses for other global QSR brands, including Costa Coffee, Tea Live, New York Fries, and Sanook Kitchen, in their respective markets.
Moreover, this strategic consolidation of the two Quick Service Restaurant (QSR) operators will also create a single unified Yum! India Franchisee for KFC and Pizza Hut. The merger is happening at a time when Indian QSR chains are witnessing sluggish growth, lower margins, and almost flat demand growth. According to the scheme of arrangements, 177 equity shares of DIL will be issued for every 100 equity shares of SFIL.
Currently, SFIL Promoters owns 25.35 per cent stake in the company, of which Arctic International, a group company of DIL, will buy 18.5 per cent. “Balance to get swapped for DIL shares,” said DIL. The proposed merger is subject to receipt of all customary regulatory and statutory approvals. “The process of obtaining these approvals is expected to take approximately 12 to 15 months, following which the merger will become effective,” according to a joint statement.
The US-based Yum! Brands has granted its approval for the consolidation of DIL and SFIL. “Upon completion, the transaction will result in DIL becoming one of the largest quick-service restaurant operators in India by combining the operations of both companies, positioning the merged entity for the next phase of accelerated growth, scale, and profitability,” it said.
Jubilant FoodWorks, promoted by the Bhartia family, is the largest QSR chain operator in India, with a network comprising 3,480 stores across six markets — India, Turkey, Bangladesh, Sri Lanka, Azerbaijan and Georgia — as on September 30, 2025. It has a portfolio of three global brands — Domino’s, Popeyes and Dunkin’ – and two of its own brands. Moreover, DIL will also acquire 19 KFC restaurants currently operated by its local unit, Yum! India.
Besides, DIL will pay a one-time charge to Yum! India is moving towards merger approval and the license fee for the additional territories. Yum! Brands operates in India with three QSR brands — KFC, Pizza Hut, and Taco Bell — mostly through franchise partners. Besides, it also owns Habit Burger and Grill, among others. Last year, DIL acquired Sky Gate Hospitality, which owns brands such as Biryani By Kilo and Goila Butter Chicken.
“This combination will allow DIL to realise meaningful economies of scale, leverage a unified technology platform, and strengthen our supply-chain capabilities. Together, these advantages will help unlock sustained value creation and long-term growth for our shareholders, customers, employees, and partners,” DIL’s Non-Executive Chairman Ravi Jaipuria said.
DIL is the largest franchisee of Yum Brands’ QSR chains, KFC and Pizza Hut, in India. In addition, DIL is the sole franchisee for Costa Coffee, Tea Live, New York Fries and Sanook Kitchen in India. It also owns the South Indian vegetarian food QSR chain Vaango. It operates stores across more than 280 cities in India, Nigeria, Nepal and Thailand, as of September 30, 2025.
Sumeet Narang, SFML nominee director of SFIL and Founder of Samara Capital, said: “We are extremely excited about this development, which brings together a single, unified franchisee for KFC and Pizza Hut in India through the merger with Devyani International Ltd. This transaction reflects the shared long-term vision and strong partnership between Samara Capital Group and RJ Corp.” Yum! Brands CFO Ranjith Roy said, “We are pleased to support this proposed merger to unlock a new phase of accelerated growth in the region and to advance supply chain operations, leading to a stronger, more resilient partner in India.” SFIL has franchise rights to operate KFC outlets in 10 states and Pizza Hut outlets in 11 states. Besides, SFIL also operates in Sri Lanka through its subsidiaries, including KFC, Pizza Hut, and Taco Bell. It operates over 1,000 restaurants in India and Sri Lanka.
Shares of Devyani International were trading 1.93 per cent higher at Rs 150.80 on the BSE, while Sapphire Foods India was trading in the negative territory, down 1.59 per cent at Rs 257.20 on BSE in morning trade.
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