The company behind India’s biggest coffee retail chain — Café Coffee Day — will launch an initial public offering (IPO) on October 14 to dilute as much as 17.55 per cent and raise ₹1,150 crore. This would put Coffee Day’s value at over a billion dollars. The IPO will be the biggest in three years.
Coffee Day Enterprises, the owner of the retail chain, has fixed a price band of ₹316 to ₹328 per equity share with a face value of ₹10 each. The shares will be listed on the BSE and the NSE.
The proceeds from the issue will be used for expansion of its cafes, setting up of a coffee roasting plant and upgrading existing stores.
Kotak Mahindra Capital Company, Citigroup Global Markets and Morgan Stanley are the lead managers.
Addressing a press conference, Coffee Day Chairman VG Siddhartha said: “The money raised will also be used for reducing our net debt, which stands at ₹296 crore.”
Private equity companies such as KKR Advisors, New Silk Route and Standard Chartered Private Equity together hold 35 per cent in the company and will stay invested, though their stake will be diluted after the IPO.
“We have been growing at a CAGR of 16 per cent with revenues of ₹1,100 crore from the coffee retail business. Now we have plans to launch 135 stores every year with highways as a priority area. Today, we are almost two times the size of our nearest competitor,” said Siddhartha.