Cafe Coffee Day parent to raise Rs1,150 cr through IPO

Coffee Day Enterprises, the operator of  the country's largest coffee chain, Cafe Coffee Day, has filed a draft prospectus with capital market regulator Securities and Exchange Board of India (Sebi) for an initial public offer (IPO) to raise about Rs1,150 crore.

The company has submitted Draft Red Herring Prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) announcing its plans to offer shares to the public.

The company plans to issue of equity shares of face value of Rs10 each for cash, including a share premium for a total value of up to Rs1,150 cr crore, as per the prospectus.

About 50 per cent of the net issue would be allotted on a proportionate basis to qualified institutional buyers (QIB), of which the company may also allocate up to 60 per cent of the QIB portion to anchor investors on a discretionary basis, bankers familiar with the company's plans said.

Coffee Day Enterprises has reserved Rs15 crore worth of shares for its employees.

Café Coffee Day was founded by V G Siddhartha, who is also the chairman and managing director with a 54.78-per cent stake. Siddhartha along with the promoter group together holds 92.74 per cent in the company.

Other major shareholders include private equity firm KKR, which owns 3.43 per cent and Infosys co-founder Nilekani who owns 1.77 per cent. PE firms including Stanchart PE and New Silk Route also hold smaller stakes in the company.

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.

The current move for an initial public offer, which follows the current bull phase in the share market, if successful, could signal a revival of the IPO pipeline and a revival of the primary capital market.