Sapphire Foods Considering Stock Split on June 19

Sapphire Foods is one of the largest franchisees of Yum! Brands Inc. in the subcontinent, and operates more than 400 KFC, Pizza Hut, and Taco Bell restaurants across India, Sri Lanka, and the Maldives. The underperforming Pizza Hut, KFC operator is considering a stock split. 

Sapphire Foods Ltd. to consider on June 19

Sapphire Foods Ltd., the operator of Pizza Hut and KFC chains in India and Sri Lanka, is planning to undertake a stock split. The company’s board will meet on June 19, 2024, to consider this corporate action. This marks the first stock split for Sapphire Foods since its listing in 2021. Currently, the shares have a face value of Rs. 10. The decision to split the shares is intended to make them more affordable and potentially more attractive to a wider range of investors. This move comes as the company seeks to address its recent underperformance in the market. The stock split is expected to generate increased interest and liquidity in Sapphire Foods’ shares.

What is a Stock split?

A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the trading liquidity of the shares. Despite the increase in the number of shares, the total value of the shares remains the same, as the split does not change the company’s market capitalization. Stock splits are generally considered in ratios, such as 2-for-1 or 3-for-1. For example, in a 2-for-1 stock split, each shareholder receives an additional share for every share they own, effectively doubling the number of shares they hold, while the price of each share is halved. This makes the stock more affordable for investors and can potentially increase trading activity in the stock.

Sapphire Foods Business

As of May 2024, Sapphire Foods has a total of 872 outlets across India, Sri Lanka, and Maldives. Out of these, 431 are KFC outlets, 432 are Pizza Hut outlets and nine are Taco Bell restaurants. The company is Sri Lanka’s largest QSR chain. For the March quarter, dine-in and delivery had an equal mix for Sapphire Foods at 39% and 40% respectively

Conclusion: Sapphire Foods Ltd. is a significant player in the quick service restaurant (QSR) sector, with a substantial presence across India, Sri Lanka, and the Maldives, operating 872 outlets under renowned brands like KFC, Pizza Hut, and Taco Bell. The stock of Sapphire foods currently trades at Rs.1439.50 a piece.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.