Samara Capital’s 10-year journey with Sapphire Foods India began with the consolidation of eight Yum Brands franchisees and about 200 KFC and Pizza Hut outlets. Since then, the footprint has grown 5x, a stake has been moved into a continuation vehicle (CV), and Sapphire has gone public.

Now, the journey is nearing an end. The merger of Sapphire and Devyani International, a larger Yum franchisor, represents a liquidity event for the CV, which will receive a mixture of cash and shares. Five years after completing India’s first transaction of this type, Samara will deliver the first exit.

“A full-cycle exit is good for the industry,” said Sumeet Narang, founder, managing director, and co-CIO of Samara. “The US and Europe are ahead of Asia on CVs. In India, not many have been done – we’ve seen one other single-asset CV and a few multi-asset transactions. Hopefully, this outcome will encourage other CVs to form and create value for LPs.”

Samara returned to the GP-led space in 2023, two years after the Sapphire CV, completing a USD 150m tail-end restructuring of its second fund. The sponsor is considering a third bite, having lined up a hospital business for a single-asset CV. The deal is still at an early stage, but the hope is it will provide momentum for a new primary fundraise, loosely scheduled for 2H26.

Sapphire was unusual in that the IPO happened within months of the CV closing in 2021. Samara had invested in the company through its second fund – which closed on USD 210m in 2014 – and that fund remained prominent in the cap table. It eventually exited in increments via the public market over the course of two years, securing a 7x return, according to Narang.

The CV mostly acquired positions from several of Samara’s co-investors that didn’t want to wait for the post-IPO lock-up period to expire. TR Capital and TPG NewQuest backed the vehicle, which was part of a wider USD 155m primary-plus-secondary transaction. Creador also participated as a new investor, while CX Partners and Goldman Sachs were among the other sellers.

“New investors took 34% of the company, but only a small portion could be sold freely. Yum had to approve the sale of a 25% block, and it wanted Samara to continue as the controlling shareholder,” said Narang.

Growth story

The CV was an elegant solution: co-investors that wanted out received a more than 3x return; Samara, which saw more upside in the business, got to maintain its exposure; and Yum was satisfied because only the investing entities changed, not the identity of the controlling shareholder.

At the time of the IPO, Sapphire Foods Mauritius (SFM), the main investment entity, held 46.8% of an overall promoter stake amounting to 52.64%. Samara and its funds owned 28.1% of SFM, Creador had 21.99% and TR and TPG NewQuest held 16.14% apiece. As of end-2025, partial exits had reduced the SFM position to 23.8%. The overall promoter stake was about 26%.

Indian consumer conglomerate RJ Corp serves as Yum’s local partner in Devyani, holding 59.3% of the company. It has committed to fulfil the same role in the larger, post-merger operation, and will therefore directly purchase 18.5% of the Sapphire promoter stake, which now stands at 25.35%. There is an option to assign a portion of that to a Yum-approved financial investor.

The remaining promoter shares will be swapped for shares in Devyani, and the same applies to other shareholders in Sapphire. Devyani will issue 177 shares for every 100 shares of Sapphire, valuing the latter at a small premium to its INR 82.6bn (USD 910m) market capitalisation, based on closing prices the day before the announcement of the merger.

“There are a lot of synergies to having a single franchisee in India. We’ve been in touch with RJ Corp for a while because we knew at some point it could be worth exploring,” said Narang.

“Over two months we were able to arrive at a merger scenario, whereby we also announced incentives from Yum, so that the combined business gets more fuel in terms of certain waivers to invest behind the brands to scale better.”

Sapphire grew from 200 outlets in 2015 – when Samara and its co-investors formed the business, committing around USD 112m in equity – to 376 in 2019 and 450 ahead of its IPO in 2021. There are now 963 across India and Sri Lanka, spanning KFC, Pizza Hut, and Taco Bell. Revenue and EBITDA for the 2025 financial year were INR 28.7bn and INR 4.92bn.

Devyani and Sapphire together will have more than 3,000 outlets, INR 78.3bn in revenue and INR 13.3bn in EBITDA. Devyani also operates Costa Coffee and Vaango, a restaurant chain offering South Indian cuisine, in India and serves as a Yum franchise partner in Nigeria, Nepal, and Thailand.

Single-asset surge?

The merger has been signed off at board level but still requires various regulatory and statutory approvals. Assuming it proceeds, investors in the CV will receive a more than 2x return with an IRR above 20%, Narang added.

AVCJ has records of 17 single-asset CVs launched in Asia since 2018. Sapphire would be the third exit, following transactions involving Australia-based EduCo International and Energy Exemplar. Narang accepts that multi-asset transactions are an easier sell right now in India – and in Asia more broadly – as investors take comfort in diversification. But he expects the market to evolve.

“My personal belief is that the single-asset opportunity will become bigger with a much more attractive risk-reward. Sometimes, when you’re trying to do multi-asset, there is a certain amount of force-fitting to create a portfolio,” he said. “But single-asset CVs have really taken off in the US and Europe, and I think the same will ultimately happen in Asia.”