New Delhi: The merged entity of Sapphire Foods India, the franchise operator of Yum! Brands' restaurants, KFC and Pizza Hut, and Devyani International is likely to cross USD 1 billion annual turnover when the deal is consummated, DIL Non-Executive Chairman Ravi Jaipuria said on Tuesday. The focus will be on turning to the Pizza Hut brand in the Indian market while accelerating the KFC business, with the merged entity taking over the technology and supply chain management of the latter.
Addressing analysts in a conference call on the merger, Jaipuria said India's food and beverage market is large, getting formalised and expanding rapidly, with independent estimates placing the broader food services market at more than USD 100 billion and the QSR segment alone at more than USD 25 billion. "By the time the merger gets consummated, the merged entity is likely to cross a billion dollar USD in annual revenues," he said, adding that the proposed merger between Sapphire Foods and DIL is "far more than combining two businesses" and is "about creating one of the largest F&B platforms in India".
The merged entity will have more than 3,000 stores globally and a turnover of approximately Rs 8,000 crore, on an annualised basis, Jaipuria said. On January 1, 2026, Sapphire Foods and DIL, one of India's largest and fastest-growing chains of quick service restaurant (QSR) operators, announced a merger through a share-swap deal.
The two companies had stated that the process of obtaining regulatory approvals for their merger is expected to take approximately 12 to 15 months, following which it would become effective. DIL is the largest franchisee for 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 the country. 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.
In FY25, DIL had a consolidated revenue of Rs 4,951.1 crore, while SFIL clocked revenue from operations of Rs 2,881.87 crore, as per their respective annual reports. Sharing structures under the proposed merger, DIL CFO Manish Dawar said the merged entity will take over marketing, innovation, technology and supply chain functions for Pizza Hut. For KFC as of now, it's going to be only technology and supply chain management, he said, adding that "marketing and innovation will continue to be run by Yum! the way it was being run in the past".
On Pizza Hut, Dawar said, "We've already negotiated with Yum! (Brands) that our priority is to turn around the business. Our priority is to put Pizza Hut back to its old, glorious days, where it used to be the market leader. Hence, we will not be under stress to open new units from where we are today. What we've negotiated is a very small number (of stores) that can be achieved".
He noted that Pizza Hut had suffered due to the rapid expansion of franchise by both companies in the last three years, which led to eating away into the margin structures, among others. By the time the merger is completed, he said, the net new unit count of Pizza Hut "will not be negative". On KFC, Dawar said, "The objective will be to kind of accelerate, but it will be a calibrated expansion". He also said the company has identified a large global technology partner to build a common technology roadmap for DIL, including KFC and DIL's own brands.
As per the scheme of arrangements between Sapphire Foods India Ltd (SFIL) and DIL, "177 equity shares of DIL will be issued for every 100 equity shares of SFIL". Moreover, Arctic International, a DIL group company, will acquire approximately 18.5 per cent of SFIL's paid-up equity share capital from the existing SFIL promoters, with an option to assign to a mutually agreed financial investor. The US-based Yum! Brands has granted its approval for the consolidation of DIL and SFIL.
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