Sapphire Foods-Devyani Merger Clears NSE, BSE Checks 2026

What the exchanges have communicated

Sapphire Foods India Ltd (SFIL) has received observation letters from the National Stock Exchange of India (NSE) and BSE Limited for its proposed merger with Devyani International Ltd (DIL). NSE issued a letter stating “no objection”, while BSE said it has “no adverse observations”. These letters were issued under Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The observations relate to a draft composite scheme of arrangement between the two entities and their respective shareholders. The scheme is being pursued under Sections 230 to 232 of the Companies Act, 2013. The exchanges said their views were formed after reviewing the draft scheme submitted by the companies and comments from the Securities and Exchange Board of India (SEBI).

Six-month window to move to NCLT

The observation letters carry a validity of six months from June 12, 2026. This means the companies must submit the scheme to the National Company Law Tribunal (NCLT) within that period for further legal and procedural steps.

The exchanges also clarified that their letters do not amount to an approval of the financial soundness of the scheme or the correctness of statements made in the submitted documents. The exchange observations are a procedural requirement in the broader approval chain for such mergers.

CCI approval is a pre-condition

A key condition in the observation letters is that the scheme must be expressly subject to approval from the Competition Commission of India (CCI). The exchanges specified that the companies cannot file the scheme with the NCLT until the CCI approval is obtained.

This sequencing matters because it sets the order of clearances the companies must secure before the merger can progress to tribunal-led hearings, creditor and shareholder processes, and eventual effectiveness.

SEBI Listing Regulations conditions highlighted

The exchanges asked the companies to ensure compliance with Regulation 11 of the SEBI Listing Regulations while implementing the scheme. They also required that the companies do not make changes to the draft scheme after filing it with SEBI, except changes that are mandated by regulators or authorities.

Such conditions are typically intended to keep the final scheme aligned with what the regulator and exchanges reviewed, and to ensure that any subsequent modifications are traceable to formal directions.

Mandatory disclosures before NCLT and shareholders

The observation letters require detailed disclosures before the NCLT and to shareholders. This includes disclosure of ongoing adjudication, recovery proceedings, prosecutions, and enforcement actions against the companies, their promoters, and directors.

The exchanges also mandated that the financials considered in the scheme should not be older than six months from the date of the stock exchange No Objection Certificate. In addition, disclosures must cover financials for the last three years and shareholding patterns.

Another specific disclosure requirement relates to the SFIL Secondary Sale. The observation notes refer to details involving 5,94,55,837 equity shares.

Promoter reclassification disclosures in Devyani

The observation letters also require disclosure of promoters and promoter group entities intending to be reclassified into the Public Category in Devyani International. This is an additional compliance and transparency requirement that becomes relevant when shareholding and control structures are expected to change after a merger.

Such disclosures are typically scrutinised because they can affect post-merger public shareholding levels and governance-related expectations.

What the merger structure looks like

The merger is structured as an all-stock deal where Sapphire Foods will merge into Devyani International, creating a single listed platform spanning India and Sri Lanka. Under the announced share swap, Sapphire shareholders are to receive 177 Devyani shares for every 100 Sapphire shares.

The appointed date for the scheme has been stated as April 1, 2026. Full integration has been described as expected within 12 to 15 months, subject to regulatory approvals.

Scale, turnover and synergy targets cited by the companies

The merger has been described by the companies as creating India’s largest food and beverage platform, with 3,000+ stores and a combined turnover of nearly INR 8,000 crore. The companies have also indicated synergy expectations of INR 210 to 225 crore within two years.

Separately, a Merger Framework Agreement has been referenced under which Devyani would acquire 81.5% of Sapphire Foods for about INR 6,860 crore, subject to multiple regulatory and stakeholder approvals.

Market reaction and other operational details mentioned

On the day referenced in the provided information, Devyani International shares were trading 1.93% higher at INR 150.80 on the BSE, while Sapphire Foods was down 1.59% at INR 257.20 in morning trade.

The broader scheme-related disclosures also refer to acquisition of 19 KFC stores from Yum India. The figures cited include a lump sum payment of INR 90 crore for acquisition of the 19 KFC stores, and INR 320 crore for rights to proceed for merger and towards additional territory rights.

Key facts table

Why these observation letters matter

The exchange observation stage is one of the checkpoints before a scheme can move into the tribunal process. For investors, the letters provide clarity on the conditions attached to the next steps, especially the requirement that CCI approval must come before the NCLT filing.

They also signal the level of disclosure the companies will need to make around proceedings, enforcement actions, promoter category changes, and scheme-linked transactions such as the SFIL Secondary Sale.

Conclusion

Sapphire Foods and Devyani International have secured the NSE and BSE observation letters needed to progress their merger scheme, with a six-month window from June 12, 2026 to file with the NCLT. The next procedural milestone, as specified by the exchanges, is obtaining CCI approval before approaching the tribunal, alongside completing the mandated disclosures and financial recency requirements.