Tuesday 21 March 2023

INDIA – Cafe Coffee Day may launch IPO next year, say insiders

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MILAN – Cafe Coffee Day (CCD), India’s biggest coffee chain, plans to launch an initial public offering (IPO) next year, it was revealed on Tuesday.

According to reports, Café Coffee Day officials are now approaching some of the potential investment banks with their draft proposal for a possible initial public offering (IPO) in the city of Mumbai by 2015.

The company, which is backed by American private equity firm, KKR & Co., may seek a valuation of about $1 billion, said three people with knowledge of the matter, who asked not to be identified as the deliberations are confidential. It plans to file a draft prospectus with the Securities and Exchange Board of India (Sebi) later this year, said the same source.

The insiders added that it is still not decided by the company whether to file IPO for only the coffee chain or its mother company Amalgamated Bean Coffee Trading Co., which also do business in the field of luxury resorts and coffee chains in India.

The offering could help Cafe Coffee Day extend its lead in India over rivals. Currently Café Coffee Day is clearly leading with the most number of stores (more than 1,650) in India.

The company holds a 64% market share in India’s specialist coffee shop sector with a, according to Euromonitor data. The market is projected to grow to Rs2000 crore ($340 million) in 2018, from Rs1,640 crore at the end of last year, Euromonitor estimates.

The chain plans to add 350 outlets by the end of next year for a total of 2,000,. At least 65% will be in high-street locations in the main residential and shopping districts in a city, he said.

Barista Lavazza, owned by Torino, Italy-based Lavazza SpA, is India’s second-largest coffee chain as of September, followed by London-based Costa Coffee.

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