In one of the biggest shake-ups in India’s quick-service restaurant (QSR) industry, Sapphire Foods India Ltd and Devyani International Ltd have agreed to merge, creating a single, unified franchise operator for global fast-food brands KFC and Pizza Hut across the Indian market.
Under the proposed arrangement, Devyani, already one of India’s largest franchisees of Yum! The Devyani group will acquire all of the Sapphire restaurants. If the acquisition succeeds, it will create the most significant combined number of KFC and Pizza Hut restaurant locations in Asia and internationally, with over 3,000 locations across Asia, including the countries of Sri Lanka, Nepal, Thailand, and Nigeria.
The combination of businesses represents a shift to have all KFC/Pizza Hut restaurants in India operated by a single major company, which will allow for alignment of strategy, supply chain, technology platform, and expansion strategies. In addition, Yum! Brands, the owner of KFC and Pizza Hut, has expressed support for this transaction, with improved commercial terms that will enhance overall growth opportunities.
Ravi Jaipuria, Non-Executive Chairman of Devyani International, called the merger, as noted in ET Hospitality, “a significant milestone and a decisive leap forward” for the QSR sector in India, saying the move would allow the combined company to hold franchise rights across the entire market for KFC and Pizza Hut and deliver accelerated growth, scale, and profitability.
Sumeet Narang, nominee director of Sapphire Foods and Founder of Samara Capital, said that ET Hospitality noted that the transaction reflects “a shared long-term vision and strong partnership”, setting the stage for sustainable expansion across brands and regions. Yum! Brands CFO Ranjith Roy also expressed support, noting the merger would help build “a stronger, more resilient partner in India” capable of advancing supply-chain operations.
The merger comes amid slowing same-store sales growth and rising cost pressures in the QSR space, where consumers are tightening spending on dining and delivery. According to analysts, combining the distribution networks of Devyani and Sapphire would create annual synergies of ₹210–225 crore starting in the second full year of operation, achieved through eliminating duplicate costs, streamlining product and service delivery through shared technology, and deploying joint marketing resources.
