Coffee Day Enterprises Ltd (CDEL), the company that owns Cafe Coffee Day (CCD) chain of restaurants, has filed a draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to float an initial public offering (IPO) to raise ₹1,150 crore (nearly $180 million).
The funds raised from the IPO will mainly be used towards repayment of debt and in opening new stores across the country.
"The company plans to open over 215 Cafe Coffee Day outlets and 105 kiosks in the next two financial years," the company said, according to The Economic Times.
CDEL filing for an IPO suggests the return of confidence among corporates to raise funds from the capital markets.
"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," Hindustan Times reported, citing bankers close to the company's IPO plans.
CDEL was started in 1996 and its founder VG Siddhartha is the son-in-law of former Union minister SM Krishna.
As of March 2015, there were 1,530 CCD outlets across 29 states. The outlets are also present in countries such as Vienna, Prague, Dubai and Karachi.
The company recorded a consolidated revenue of around ₹1,800 crore in the first three quarters of FY15, with a loss of nearly ₹75 crore, Livemint reported.
Infosys Ltd co-founder Nandan Nilekani, billionaire investor Rakesh Jhunjhunwala and stock broker Ramesh Damani have also invested in the company in the past.
Over the past few years, competition in cafe business in the country has got fierce with the entry of international chains such as Starbucks Corp and Coffee Bean & Tea Leaf.
CDEL also holds Coffee Day Hotels and Resorts Pvt Ltd, Global Technology Ventures Ltd and Tanglin Developments Ltd.
