Sapphire and Devyani Take Their Merger to the CCI — the Amended Scheme's First Regulatory Test

On September 10, after the market closed, Sapphire Foods and Devyani International each informed the exchanges of the same event: the two companies have filed a joint application with the Competition Commission of India under the Competition Act, 2002, in connection with the proposed merger of Sapphire Foods with and into Devyani International. Our August 26 report covered the boards approving the Amended Scheme of Arrangement; this is the first regulatory step both companies have disclosed since. In their own words, the filing forms part of the regulatory approval process in connection with the Scheme.

The mechanics, as the filings state them: the merger is a Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013, under which Sapphire Foods (the Transferor Company) would be dissolved without being wound up consequent to its amalgamation with and into Devyani International (the Transferee Company). Both boards first approved the Scheme on January 1, 2026, alongside a merger framework agreement among the two companies, RJ Corp Limited (Devyani's holding company), Sapphire Foods Mauritius Limited (SFML, Sapphire's promoter) and Sagista Realty Advisors Private Limited. The Scheme's effectiveness had been conditional on SFML selling about 18.5% of Sapphire (roughly 5.95 Cr shares) to Arctic International Private Limited; on August 26, 2026, SFML and Arctic terminated that share purchase agreement by mutual consent, and both boards approved an Amended Scheme removing this Secondary Sale Transaction as a condition precedent — SFML will instead receive Devyani shares under the Scheme like other Sapphire shareholders, resulting in a post-scheme promoter holding of 41.99%, versus 61.37% held pre-scheme. Neither the August 26 nor the September 10 intimations quoted here state what stage the scheme reaches next or when.

1. 1 Jan

   Boards of both companies approve the Scheme of Arrangement and the merger framework agreement, per the companies' recap of their January 1 disclosures.

2. 26 Aug

   Boards approve the Amended Scheme of Arrangement; both companies file after market close. Next session, Aug 27: Sapphire −4.0%, Devyani −2.2%.

3. 10 Sept

   Joint application filed with the CCI under the Competition Act, 2002 — described as part of the regulatory approval process. Filed after close; first tradable session is Sep 11.

Sapphire ran from ₹179.12 on July 24 — the day Q1 FY27 results were filed during the session — to ₹249.81 on August 25, a gain of 39.5% in about a month, on repeatedly heavy volumes. The first session after the amended-scheme filings, August 27, closed −4.0% at ₹239.74, and the stock has drifted since to ₹224.11 — 10.2% below the August 26 close and 33.4% below its 52-week adjusted high of ₹336.7. Devyani traced a similar arc: from ₹109.87 on July 23 to ₹149.90 on August 25 (+36.4%), a −2.2% first session after the amendment, and ₹135.92 by September 10, 9.0% below its August 26 close. Whether the drift reflects the amendment's terms or broader positioning is not something these filings establish.

The quarter both companies bring to the table was a turn. Sapphire's consolidated P&L showed net losses in all four quarters of FY26 (−₹1.7 Cr, −₹12.8 Cr, −₹4.8 Cr, −₹12.6 Cr) before Q1 FY27's ₹14.0 Cr profit; its own investor release called it "our 2nd consecutive quarter of strong performance" with "15% Revenue growth (best in last 11 quarters)", "37% Adj. EBITDA growth (best in last 15 quarters)" and positive same-store sales growth across KFC, Pizza Hut India and Sri Lanka — the company's characterization, from its July 24 press release. Devyani, which posted consolidated losses in the last three quarters of FY26, printed ₹17.1 Cr of net profit on ₹1,580.5 Cr of revenue.

Two shareholding facts frame the combination, both as of June 30, 2026: Devyani's promoters hold 61.36%, while Sapphire's promoter holding is 26.07%. And one disclosure sits in the window between the amendment and the CCI filing: Sapphire director Sanjay Purohit sold 694,445 shares in a market sale on September 3 for ₹15.87 crore, taking his holding from 0.500% to 0.280%, per the insider-trading disclosure of September 4. The disclosure records the sale; it states nothing about its reasons, and none should be read into it here.