PE-backed Coffee Day targets $180m India IPO

The company's draft red herring prospectus does not indicate how many shares will be sold or at what price. Over half of the proceeds of the offering will be used to repay debt, with the remainder going towards opening new branches, manufacturing vending machines, refurbishing existing facilities, and building a new coffee roasting plant and packing facility.

Coffee Day opened its first outlet in Bengaluru in 1996 and now has a network of 1,472 coffee shops across 209 cities. Its share of the chained café outlet market in India is 48% and the café footprint is nearly four times the size of the next four competitors, according to market research firm Technopak.

The majority of these outlets operate under the Café Coffee Day brand. The company also has 28,777 vending machines, 424 retail outlets selling coffee powder, 590 Coffee Day Xpress kiosks, and an export business. In addition, there are a number of non-coffee assets covering technology parks, logistics, financial services and hospitality.

SCPE subscribed to 1.36 million compulsorily convertible preference shares in Coffee Day in February 2010, paying INR2.4 billion. These will convert into 13.97 million equity shares.

KKR and NSR invested the following month. KKR subscribed to 500,000 equity shares for INR884 million and 27.16 million compulsorily convertible debentures (CCDs) for INR2.72 billion. Almost all of NSR's INR3.6 billion commitment was used to subscribe to 35.99 million (CCDs). KKR, which now holds a 3.43% equity interest in Coffee Day, will see its CCDs convert into 17.83 million shares, while NSR will get 22.41 million shares.

The promoter, V.G. Siddhartha, has a 54.78% interest in the company.

Coffee Day reported revenue of INR23.53 billion for the 12 months ended March 2014, up from INR21.49 billion the previous year. The net loss widened to INR1.38 billion from INR738.9 million. EBITDA for 2014 was INR1.89 billion.

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• Topics
• Exits
• South Asia
• Consumer
• India
• NSR New Silk Route Partners
• IPO
• Consumer
• Standard Chartered Private Equity
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