Private equity firm New Silk Route has completed its fourth control transaction by picking up a significant stake in Bangalore-based Vasudev Adiga’s Fast Food Ltd, which runs a chain of South Indian restaurants. The deal came following the private equity firm’s plans to create a platform in the food & beverages (F&B) sector. New Silk Route is looking to invest $100 million or Rs 500 crore in a portfolio of F&B formats.

“Certain factors like liberalisation of the economy, growing income of the middle-class population and macro-economic conditions have had a positive impact on consumer spending and consumption in both rural and urban areas, thus boosting the growth of this sector,” a statement from NSR said.

The deal with Adiga’s marks NSR’s second investment in the F&B space after backing the holding company Cafe Coffee Day, India’s largest coffee chain, along with Kohlberg Kravis Roberts & Co (KKR) and Standard Chartered Private Equity.

Cipher Capital was the sole advisor to the transaction.

Vasudev Adiga’s currently has 11 restaurants in Bangalore and one on the Bangalore-Mysore highway. Adiga’s is an offshoot of the famous Brahmin’s Coffee Bar at Basavangudi (Bangalore), which was started in 1965 by late KV Nageshwar Adiga. The company is now run by second-generation entrepreneur KN Vasudev Adiga who is also an engineering graduate.

Besides restaurants, Adiga’s also has presence in event catering business. Its corporate clients include marquee names like SAP, NDS, Ingersoll Rand and Honeywell.

“We see tremendous potential in Adiga’s as it has combined the strengths of two different and popular formats – restaurants and event catering. Our aim is to help Adiga’s expand, initially in Bangalore and eventually across India, so that it can become India’s first homegrown national chain of restaurants. Since there is an unmet demand for good quality south Indian food even in other parts of the country, achieving our goal should not be a challenge,” said Jacob Kurian, partner at NSR Advisors.

NSR Eyeing Significant Stakes

The deal is the third investment announced this year by New Silk Route, an Asia-focused private equity and growth capital firm with $1.4 billion assets under management. It recently invested Rs 175 crore in VRL Logistics Ltd and also picked up a significant minority stake in Hyderabad-based education support services provider Varsity Education Management Pvt Ltd.

It had earlier picked up controlling stakes in companies like Ascend Telecom Infrastructure (telecom tower), 9X Media Pvt Ltd (which runs the Hindi music channel 9XM) and Destimoney Enterprises (financial services).

NSR also acquired minority stakes in companies like Nectar Lifesciences, Reliance Infratel and Rolex Rings.

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