New Delhi1 hour ago
- Copy link
File photo
DIL, who runs a popular food chain like KFC, Pizza Hut and Costa Coffee in the country, is now another Indian dish in its basket. It took 81% stake in Sky Gate Hospitality running Biryani by kilo (BBK) restaurants in the hall. The deal was done for Rs 420 crore.
In this way, DIL has tried to compete with its rival business Jubilant Foodworks's 'Absolute Biryani' brand. Come, let's understand why companies running foreign food chains in the country are betting on Biryani? He also has his own South Indian food brand Wango …
Question: What does Sky Gate Hospitality do?
answer: The company's most talked about brand is Biryani by -kilo (BBK). Apart from this, there are other brands like Goila Butter Chicken. BBK started Biryani's delivery service, which is famous for a small heater with earthen utensils and a small heater coming with every order. It also has more than 100 restaurants across the country.
Question: Why is this deal so important? answer: Biryani demand is very high in India, this cannot be denied. In just one year (2024), Food delivery app Swiggy and Jomato delivered 17 million biryani. That is, 330 orders of Biryani are being delivered every minute. In this context, it is the most popular food dish in India.
Question: How big is Biryani market in the country? answer: Biryani market in India is about Rs 20,000 crore. Interestingly, most parts of this market are occupied by small, unorganized players. Large organized brands such as BBK, Behroz and Absolutely Biryani are only a small part (about 15%). That is, there is a lot of potential for expansion in this business.
Question: How will DIL benefit? The Sky Gate can buy DIL BBK, Goila Butter Chicken and The Food to its existing restaurant and cloud kitchen (kitchen for delivery only). DIL's business is growing regularly, but compared to that Sky Gate is growing from 55 compounded rates (CAGR) annually in the last 5 years. This can lead to DIL sales and profits.
Question: What is the benefit of Sky Gate from this deal? Investors who initially supported Sky Gate are selling their stake. This means that Sky Gate will get new capital for future expansion. More than just capital, Sky Gate will get support from a large and experienced franchise operator like DIL.
DIL has more than 1,500 stores across India. Many of these are in small towns. This network can help BBK and their other brands reach many more customers.
Question: What will be the effect in Biryani market? The deal will bring Sky Gate to a strong position to directly compete with other large biryani brands such as Behroz Biryani's parent company Rebel Foods, preparing to bring its IPO.
Only venture capital money would have been difficult to compete with such a player. But now, Sky Gate is not only getting capital, but also coming with a big company like DIL will also get access to a broad market. Getting the benefit of his experience can also show improvement in operational capacity.
