Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
Samara Capital backed KFC and Pizza Hut operator Sapphire Foods witnessed a decent debut on the bourses as the shares opened for trading at Rs 1,350 on the NSE implying a premium of Rs 170 or 14.41% over its issue price of Rs 1,180 per share. On the BSE the company got listed at Rs 1,311.
The Rs 2,073.25 crore issue was subscribed 6.62 times as it received bids for over 6,39,45,000 shares as against 96,63,468 shares on offer. The retail individual investors category was subscribed 8.7 times. The qualified institutional buyers (QIBs) category was subscribed 7.5 times and non-institutional investors category was subscribed 3.46 times.
Ahead of the IPO, Sapphire Foods finalised the allocation of 79,06,473 equity shares to anchor investors at Rs 1,180 per equity share, aggregating to Rs 932.96 crore.
The public offering was a complete offer for sale of shares worth Rs 2,073.25 crore by existing shareholders – Sapphire Foods Mauritius, QSR Management Trust, WWD Ruby, Amethyst, AAJV Investment Trust, Edelweiss Crossover Opportunities Fund and Edelweiss Crossover Opportunities Fund- Series II.
Sapphire Foods, an omnichannel restaurant operator and the largest franchisee of Yum Brands in the Indian sub-continent, is backed by marquee investors such as Samara Capital, Goldman Sachs, CX Partners and Edelweiss.
The company’s association with Yum started in 2015 and they presently have the non-exclusive rights to operate restaurants under 3 of YUM’s leading brands, namely, the KFC, Pizza Hut and Taco Bell brands in the Territories.
As of June 30, 2021, it owned and operated 209 KFC restaurants in India and the Maldives, 239 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and 2 Taco Bell restaurants in Sri Lanka. Total number of restaurants are 450 as of June 30, 2021.