New Silk Route mulls Adiga’s deal
Growth capital firm New Silk Route Partners is in talks to buy a sizable stake in Adiga's, a chain of south Indian vegetarian restaurants and fast food joints.
The proposed deal would value the restaurant network at around INR2 billion ($39 million), three sources told the Times of India.
A Mumbai-based boutique investment bank is managing the sale of the stake, which could make New Silk Route the largest shareholder in the company.
Former engineer K N Vasudev Adiga founded Adiga's in Basavanagudi, Bangalore, in 1994. It has grown quickly to become an established local vegetarian brand, and now operates 12 multi-cuisine restaurant chains, fast food joints and catering services.
Adiga described the prospective private equity investment as "market speculation."
New Silk Route has reportedly spent more than two years looking for suitable targets in the Indian restaurant sector. The private equity firm runs a $1.4 billion Asia fund, which was launched in 2006 and is now nearly 60% deployed. India is the fund's primary focus, and last year it closed an investment in Sri Chaitanya Educational Group.
India Equity Partners and Everstone Capital have also been seeking out opportunities in this area, and in August 2011, India Equity purchased a majority stake in specialty restaurant chain Sagar Ratna Hotels for INR1.8 billion. Everstone, meanwhile, agreed to buy a 45% stake in Pind Balluchi, a New Delhi-based restaurant chain, for about $20 million last December.
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