India's Cafe Coffee Day Plans IPO

NEW DELHI—The firm behind India's biggest coffee chain, Coffee Day Enterprises Ltd., said Friday it plans to go public and raise $181 million, as it looks to solidify its presence in a country whose growing cafe culture has drawn global giants such as Starbucks Corp. and Dunkin' Brands Inc.

Coffee Day Enterprises, which runs Cafe Coffee Day outlets across the country, didn't specify the size of the stake it is selling. Previous estimates have valued company at nearly $1 billion. A company spokeswoman declined to elaborate.

Formed in 1996, Cafe Coffee Day is credited with triggering a cafe craze in the country, flooding not just India's metropolises but also its smaller cities with cafes. The Bangalore-based company leads India's coffee chain sector with more than 1,400 outlets across 209 cities. Rivals Starbucks and Dunkin' Donuts have fewer than 100.

While India is a nation best known for its tea drinkers, sipping coffee and socializing at coffee shops is becoming increasingly popular. Domestic consumption of coffee rose to an estimated 108,000 metric tons in 2010, up 80% in the past decade, according to government figures. Indian consultancy Technopak said revenue from cafes likely would percolate to $410 million in 2017 from about $230 five years ago.

Coffee Day Enterprises Ltd. said money raised will be used to clear a debt of roughly $100 million. Another $36 million will be used to expand its footprint and revamp its existing store network.

Write to Preetika Rana at [e-mail]

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