Restaurant-chain Sagar Ratna’s founder Jayaram Banan has regained full ownership of the chain by buying back the controlling stake from PE firm India Equity Partners (IEP Fund Advisors) through his company Ocean Pearl Hotels for an undisclosed amount.
According to company officials, Banan had sold 77 per cent stake in Sagar Ratna to the private equity firm for about ₹132 crore in 2011, while retaining the rest. While the company did not disclose the current deal size, sources said Banan bought back the controlling stake at a similar valuation.
Since the initial stake sale, differences over operational and governance issues had led to a legal tussle between the company’s founder and the PE firm. IEP Fund Advisors had been reportedly looking to exit Sagar Ratna for some time but was unable to find buyers. Meanwhile, Banan had also expressed his intent to buy back the restaurant.
With the control back firmly in his hands, Banan, who had opened the first restaurant in 1986 in South Delhi, said: “The focus will be now on aggressive expansion and making the brand more successful. We have drawn plans to open at least two restaurants per month, on an average. We aim to become one of the largest vegetarian restaurant chains in the country.”
The company said it was looking to open 100 company-owned outlets in the next three-five years and would look at opening an equal number of franchised stores across the country. Sagar Ratna currently has 95 outlets, out of which 36 are company-owned stores.
Replying to a query on the issues surrounding the company, Roshan Banan, Managing Director, Ocean Pearl Hotels, said: “We believe Sagar Ratna continues to hold a strong position in the market and there has been no dent to the brand. Those issues were not directly related to the brand, but those issues were more at the partner level, that have been resolved since then….”
The company also plans to double the number of outlets under its brand, Swagath, which currently has 11 outlets in the Delhi-NCR region, besides expanding its hotels operations under brand Ocean Pearl.
Scouting for partners“We are in preliminary talks with prospective partners to open Sagar Ratna and Swagath outlets in markets such as the US, Gulf Cooperation Council and Australia,” he added.
“We will be investing about ₹70-100 crore on expansion. This will be done through internal accruals but we could also look at external sources of funds,” he told BusinessLine.
The company will also enter the packaged food segment. “We will be retailing products like namkeens, savouries, pickles, coffee powder, sambhar powder at our stores,” the Managing Director added.