Coffee Day Enterprises gets Sebi nod for Rs 1,150 crore IPO

Coffee Day Enterprises, which owns one of the largest coffee chain Cafe Coffee Day in the country has received markets regulator Sebi's approval to raise Rs 1,150 crore through initial public offering (IPO).

The group had filed its draft red herring prospectus (DRHP) with Sebi through its lead merchant banker Kotak Mahindra Capital Company Limited on June 26 this year.

Securities and Exchange Board of India (Sebi) issued its final observations on the draft offer documents on August 14, which is necessary for companies to launch any public offer.

As per the draft papers, the company intend to raise an estimated Rs 1,150 crore to focus on its expansion plan and pay off debt.

The company proposes to list its shares on the BSE and the NSE.

Coffee Day Global Limited had a total income of Rs 1,154 crore and operating profit of Rs 189 crore in 2013-14 fiscal.

Out of the capital raised through the issue, the parent company plans to utilise nearly Rs 632 crore to pay off debt and the remaining to open new stores, set up coffee bean roasting plants and make vending machines, the proposal said.

In the next two financial years, the company plans to open over 215 outlets and set up 105 kiosks.

In addition to having the largest chain of cafes in India, the company also operates a vertically integrated coffee business which ranges from procuring, processing and roasting coffee beans to retailing coffee products across various formats.

Started in 1996 in Bengaluru, CCD now operates over 1,500 outlets and commands a market share of 46 per cent with a network nearly four times larger than the cumulative footprint of the next four rivals.