Coffee Day Enterprises , which among other businesses, owns and operates Café Coffee Day (CCD) food and beverage outlets in India has announced plans to enter the capital market on October 14, 2015, to raise about Rs.1,150 crore through a public issue of its equity shares.
It will be the biggest IPO to hit the capital market in three years, said merchant bankers.
The company will offer equity shares of face value of Rs.10 each for cash including a share premium. None of the private equity investors are selling shares to exit or part exit the company.
The price band has been fixed from Rs.316 to Rs.328 per equity share. The minimum bid lot is 45 shares and in multiples of 45 shares therein. The issue will close on October 16, 2015.
The company will make fresh issue of equity shares to mobilise funds to retire debt and meet business expansion plans of the coffee business, said its Chairman V.G. Siddhartha. Shares worth Rs.15 crore have been reserved for eligible employees.
CCD is India’s largest coffee chain with over 1,500 outlets in 219 cities. The brand competes with Starbuck, Costa Coffee and Barista in India. Some of the private equity investors, which have invested in the company include KKR and New Silk Route among others.
Coffee Day Enterprises is the parent company of the Coffee Day Group, which currently operates in businesses such as coffee, development and management of IT-ITeS technology parks, providing integrated logistics solutions, financial services, hospitality and investing in technology companies.
The company is engaged in the coffee business through the subsidiary, Coffee Day Global and its subsidiaries. It is also engaged in coffee trading.
“The company owns the brand (CCD) and operates all the stores. We are the only F&B brand owned by an Indian company not a foreign franchise,” Mr. Siddhartha said.
The company, which has debt of Rs.2,672 crore as on June 30, 2015, plans to repay debt to the tune of Rs.632 crore including Rs.122 crore for the coffee business. The balance amount from the IPO proceeds will go towards meeting store expansion and general corporate purposes.
The company plans to set up new Café Network outlets and Coffee day Xpress kiosks.
The company opened its first Café Coffee Day outlet in Bengaluru in 1996 and has since then grown to be India’s biggest coffee chain.
