India’s largest IPO in 3 years coming soon

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MUMBAI: Coffee Day Enterprises, which owns Café Coffee Day, India’s largest café chain by store size, plans to raise as much as Rs 1,150 crore through the offer, which will be launched on October 14.

CCD, as the chain is widely known, competes with the likes of Starbucks and Barista in Asia’s third largest economy. Outside India, it has outlets in Austria, the Czech Republic and Malaysia.

“In 1995, globally, the café culture had picked up and I told my management team I wanted to put up cafés in India,” VG Siddhartha, chairman and founder of Coffee Day Enterprises, wrote in the Forbes Magazine in 2011. The son of a coffee plantation owner, Siddhartha had started the chain with a capital of Rs 1.5 crore.

In anticipation of the upcoming IPO, Quartz has culled some interesting, lesser-known facts about the company behind CCD. An emailed questionnaire sent to CCD remains unanswered.

CCD is all about scale. The company had 1,423 outlets across India and abroad at the end of last year, a number that has grown to 1,538 stores over the last few months.

“Big brands came and said that they will open 500 to 1,000 stores and so we decided that we need to reach a scale of at least 1,500 stores by 2015 to remain ahead of competition,” Siddhartha told reporters on the sidelines of a press conference on October 7.

Each CCD averages daily food and beverages sales of about Rs 11,927. In comparison, a competitor like Starbucks makes over five times that amount, according to retail consultancy firm Technopak. However, CCD has many more outlets than Starbucks – the American coffee company had 64 cafés in India as of December 2014 – and cheaper offerings.

 

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