Leading coffee shop chain operator Coffee Day Enterprises has filed a draft application with capital market regulator Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) to raise about Rs 1,150 crore.
The company, which runs one of India's largest coffee chains Café Coffee Day and counts for mer Infosys co-founder Nandan Nilekani among one of its shareholders, has submitted the Draft Red Herring Prospectus (DRHP) with Sebi to announce its intention to offer shares to the public. The move signals revival of the IPO pipeline and a return of faith among corporates to generate funds from the capital market.
According to the bankers familiar with the plans of Coffee Day Enterprises, about 50% of the net issue would be allotted on a proportionate basis to qualified institutional buyers (QIB) - a large select group of investors - where the company may also allocate up to 60% of the QIB portion to anchor investors on a discretionary basis. Coffee Day Enterprises has reserved Rs 15 crore worth shares for its employees.
The company was founded by VG Siddhartha, who is also the chairman and managing director with a 54.78% stake, while all promoters together have 92.74% holding in the company. Among other major shareholders, private equity firm KKR owns 3.43%, while Nilekani has 1.77%. Other PE firms includ Stanchart PE and New Silk Route.
Coffee Day Enterprises was among the first food and speciality restaurant companies in India to bring in private equity firms during the bull run period post 2006.