Serial entrepreneur VG Siddhartha has concluded $200-million fund raising in the holding company of the Coffee Day Group, the investment vehicle for his diversified business conglomerate. Private equity major New Silk Route (NSR) closed a $75-million investment on Tuesday night bringing to an end nearly a year-old capital-raising exercise.
Kohlberg Kravis Roberts & Co (KKR) and Standard Chartered Private Equity (SCPE) had inked $75 million and $50 million investments respectively earlier this month. The three PE firms, who have invested through convertible instruments, will together hold around 25% stake in the company (indicating a valuation of over $800 million). A media statement on the development is expected anytime now.
VCCircle was the first to report that Coffee Day will raise a $200 million round which would include PEs like KKR and SCPE.
The deal, also one of the largest in a privately held company, comes after the recently concluded $425 million round in Asian Genco, a Singapore-based holding company that owns power assets across India.
Siddhartha, one of the most chased entrepreneurs by the investment community, will use the funds for his different businesses spanning Cafe Coffee Day, hotels and resorts, waste management, SEZ and real estate. He is also believed to be mulling entry into a some new sectors.
Coffee Day controls Siddhartha's business interests other than coffee plantations in South India. He possibly is the biggest player in coffee plantations and one of the top coffee exporters from India. This enigmatic but highly networked entrepreneur shot to limelight more than a decade-ago with Cafe Coffee Day (CCD), which is India's largest cafe retail chain now.
PE investors feel that Siddhartha is a rare case of a matured Indian entrepreneur with the ability to scale up businesses at break-neck speed.
Besides being a fully integrated player in the coffee chain space, Siddhartha also has diversified operations spanning financial services, venture capital investments and infrastructure. Coffee Day's companies include CCD, Coffee Day Hotels and Resorts Pvt Ltd, broking firm Way2Wealth Brokers Pvt Ltd, venture capital firm Global Technology Ventures Ltd, and Tanglin Development Ltd (which is developing technology parks in Bangalore and Mangalore).
Coffee Day had earlier raised private equity funding from Sequoia Capital India and mezzanine financing (a hybrid of debt and equity) from Darby Investments (an arm of Franklin Templeton) in its Cafe Coffee Day arm while it raised structured financing from JP Morgan and Deutsche Bank.
A Business Standard report last month said, Tanglin is in discussions with HDFC’s real estate private equity fund to raise Rs 300 crore.
Siddhartha had said last year that Coffee Day was planning a capital expansion of Rs 1,700 crore under which it will invest Rs 700 crore in retailing business and another Rs 750 crore in infrastructure and special economic zones (SEZs). CCD is India's largest coffee café chain, is aiming reach to 1,000 outlets and revenues of Rs 840 crore by the end of this fiscal year. It is planning to expand to Europe, Middle East and South East Asia with a targeted turnover of $1 billion by 2015.