Cafe Coffee Day’s IPO oversubscribed 80%

The initial public offer (IPO) of Coffee Day Enterprises Ltd, which runs India's top coffee chain under the Cafe Coffee Day (CCD) brand among other businesses, sailed through comfortably with over-subscription of 80 per cent at the close of the issue on Friday, data collated by exchanges showed.

The issue had a real slow start to begin with and saw only 13.3 per cent of the issue covered on the first day on October 14. However, it saw bids worth 75 per cent of the share sale at the end of the second day.

Stock-exchange data showed that the IPO subscription was led by qualified institutional buyers. The portion reserved for them was oversubscribed and got bids worth 4.48 times their quota.

On the other side, retail investors and non-institutional investors & high net-worth investors portions have been under-subscribed with the two receiving bids for just 89 per cent and 53 per cent, respectively.

The Bangalore-based company was eyeing Rs 1,165 crore in its IPO, including Rs 15 crore from a portion reserved for employees. The issue will allow the firm to raise capital that it could use to maintain its lead over US coffee chain Starbucks and other rivals in the bustling Indian market.

On the eve of the IPO, which opened for subscription on Wednesday, the company raised Rs 334.2 crore ($51.3 million) from anchor investors at the upper end of the price band.

The IPO, one of the biggest in years, values the company at Rs 6,551 crore to 6,800 crore ($1-1.04 billion).

The firm had raised Rs 100 crore from a group of investors, including Infosys co-founder Nandan Nilekani, Rakesh Jhunjhunwala and Ramesh Damani early this year. The coffee chain counts a string of private equity backers, including KKR, New Silk Route and Standard Chartered Private Equity. Notably, none of the PE investors is looking to cash out in the IPO.

Kotak Mahindra Capital, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and YES Bank are bankers for the IPO.

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