Devyani International Ltd (DIL), a prominent player in the Indian Quick Service Restaurant (QSR) sector, is set to acquire a majority stake in Sky Gate Hospitality, the parent company of the popular Biryani by Kilo (BBK) chain. The acquisition, which will expand DIL’s diverse restaurant portfolio, includes BBK’s dine-in outlets and cloud kitchens. DIL, which operates franchise chains like KFC, Pizza Hut, and Costa Coffee, is poised for further growth as it integrates BBK’s business into its operations. The deal, which is expected to be approved by DIL’s board on April 24, 2025, marks a strategic move to tap into the growing demand for delivery-based dining options in India.
Devyani International’s Expansion Plans
Devyani International Ltd (DIL), widely recognized for its franchise operations in India and abroad, has taken a significant step toward expanding its restaurant portfolio by acquiring a majority stake in Sky Gate Hospitality, the company behind the successful Biryani by Kilo (BBK) brand. BBK is a well-established biryani and kebab delivery chain, which has expanded across India, with more than 70 dine-in outlets and a significant presence in cloud kitchens.
The acquisition, which is expected to be finalized following the board’s approval on April 24, 2025, will provide Devyani International with a controlling stake in Sky Gate Hospitality. Though the details, including the number of shares to be acquired and the total price, have not been disclosed, the transaction represents a clear strategy by DIL to diversify its business into new dining categories and delivery-based restaurant models.
The move will strengthen DIL's position in the Indian foodservice sector, which has seen a rapid shift towards food delivery services in recent years. The company’s acquisition of BBK adds a popular, homegrown brand to its growing portfolio of international and regional restaurant chains.
A Diverse and Expanding Portfolio
DIL’s growth trajectory has been impressive. The company is already one of the largest operators of QSR franchises in India, with 900 KFC outlets, 580 Pizza Hut stores, and over 190 Costa Coffee cafes across multiple countries, including India, Nepal, and Nigeria. In addition to its franchise operations, DIL owns the Vaango chain, which focuses on South Indian vegetarian cuisine, and now, it will add Biryani by Kilo to its roster of brands.
Founded in 2015, Biryani by Kilo has become a popular name in India’s dining scene, offering high-quality, fresh biryanis and kebabs through dine-in restaurants and a robust delivery model. Its expansion has been bolstered by the rising demand for at-home dining, particularly in the wake of the pandemic. BBK's approach to home delivery, along with its dine-in outlets, positions it as a key player in the growing delivery food sector, aligning perfectly with DIL’s strategy of catering to a diverse customer base that increasingly demands convenience without compromising on quality.
Strategic Synergies: BBK and Devyani International
The acquisition of Sky Gate Hospitality opens up new avenues for synergies between BBK’s existing operations and DIL’s extensive network of QSR outlets. DIL, being a major franchisee for Yum Brands (owners of KFC and Pizza Hut), has honed its expertise in large-scale restaurant operations and food delivery services. By incorporating BBK’s successful delivery model into its operations, DIL stands to further capitalize on the growing trend of online food delivery.
BBK’s cloud kitchen operations also align with DIL’s ongoing focus on innovation and technology within the foodservice industry. As cloud kitchens continue to gain prominence, DIL’s acquisition will give the company a strategic edge in expanding its reach to customers who prefer ordering food online. The integration of BBK’s operations will enable DIL to create a more diverse and flexible portfolio, catering to a wider range of customer preferences, from dine-in experiences to takeaway and delivery services.
Financial and Operational Outlook
The strategic acquisition underscores Devyani International Ltd’s strong financial performance and operational stability. The company’s aggressive expansion, especially in international markets, has positioned it as a leader in India’s QSR space. DIL’s operations are not only extensive but also diversified, with each brand under its umbrella catering to different segments of the Indian food market.
As of December 31, 2024, Devyani International operated over 900 KFC stores, 580 Pizza Hut outlets, and 190 Costa Coffee cafes. These numbers reflect the company’s robust growth and ability to scale rapidly in both established and emerging markets. By adding Biryani by Kilo to its portfolio, DIL is further enhancing its capabilities to serve a broader range of customers across different dining formats, from casual dining to delivery and takeout.
Conclusion: A Bold Move in the QSR Sector
The proposed acquisition of Biryani by Kilo is a bold move by Devyani International Ltd, signaling its intent to expand and diversify its offerings in the highly competitive Indian foodservice industry. By acquiring a majority stake in Sky Gate Hospitality, DIL will not only strengthen its presence in the biryani and kebab delivery space but also tap into the lucrative cloud kitchen and delivery model, which is increasingly shaping the future of the food industry. As the company continues to grow and innovate, this acquisition marks another significant step in DIL’s ambitious strategy to solidify its leadership in the Indian and global QSR market.
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