Kotak Mahindra Investments Ltd has offloaded a 5.54 per cent stake in Speciality Restaurants, which owns and runs restaurant chains like Oh! Calcutta, Mainland China, Asia Kitchen by Mainland China, Café Mezzuna and Hoppipola.
The shares were sold off-market on December 5, the company said in a filing with the Bombay Stock Exchange. In an off-market deal, shares are privately transferred between two shareholders without the involvement of a share broking firm.
Post the sale, Kotak Mahindra Investments – which is not a part of the promoter or promoter group of Speciality Restaurants – will own 0.02 per cent stake in the latter.
Kotak Mahindra Investments is a 100 per cent subsidiary of Kotak Mahindra Bank. The company is primarily into financing against securities, lending to real estate sector. It is also into corporate and other structured finance and makes strategic investments. Kotak Mahindra Investment, its website says, has a “consolidated book of about ₹7,000 crore”.
On the other hand, Speciality Restaurants is listed on both the NSE and the BSE, with Anjan Chatterjee and his wife Suchhanda Chatterjee being the major promoter and promoter group shareholders, holding 51.19 per cent stake as on September 2019. “The transactions are not by the promoters or promoters’ group,” Anjan Chatterjee, Chairman and Managing Director, Speciality Restaurants told BusinessLine .
Cautious expansion
Speciality Restaurants has been cautious when it comes to expanding this fiscal (FY-20). Chatterjee maintains that “some expansion” has happened across brands in places like Kolkata and Mumbai.
According to him, withdrawal of input tax credit under the Goods and Service Tax (GST) regime has made a big dent on restaurants and has hurt the margins. Previously, VAT and service tax could be claimed as input tax credit. Even rentals and some other costs were clubbed as input tax credit. However, once GST rates were slashed to 5 per cent, the input tax credit was withdrawn. This has led to an increase in capital costs and other expenses.
“There is a 7-7.5 per cent impact on capex and on margins,” he explained.