"The company has exhausted the money it raised from Aditya Birla PE and will need more capital for its future plans," an investment banker with knowledge of the development said. In 2012, Aditya Birla Private Equity, part of the Aditya Birla Financial Services Group owned by billionaire Kumarmangalam Birla, invested around $10 million for a minority stake in Olive Bar & Kitchen Pvt Ltd, which owns the Olive, Monkey Bar, LAP, Ai and Soul Fry brands. In 2000, AD Singh started Olive Bar & Kitchen’s flagship chain of restaurant, Olive.
The company owns a clutch of fine dining restaurants serving different set of customers, a night club and a catering business. Olive is present across Mumbai, Delhi and Bangalore. "Aditya Birla PE will not exit through this second round of fund raise. The company needs capital to expand and hence this will be primary fund raise," another person with direct knowledge of the development said. AD Singh, managing director of Olive Bar & Kitchen, did not respond to an emailed questionnaire, while Aditya Birla PE spokesperson declined to comment.
Olive Bar & Kitchen also has Centrum Capital promoter Chandir Gidwani and Manmohan Shetty, the owner of Adlabs Films and entertainment park Imagica, as investors. The company had revenues of Rs 37.84 crore in the financial year 2013 with profit after tax of Rs 1.53 crore, according to credit rating agency CARE Ratings. "The overall revenue stream is fairly diversified across not only various locations but also across various brands," said the report released on April 2014. "However, its ability to successfully achieve better occupancy at both existing as well as new outlets and maintain its profitability margins shall be critical from a credit perspective."
"Fine dining remains the smallest share in the overall market, but along with casual dining and quick service restaurants, the segment is growing faster," said Saloni Nangia, President at Technopak, adding that profit margins are better in fine dining. With an increase in disposable income levels and frequent dining out fast catching up among the middle class, the restaurant industry in India is expected to grow at 17% annually. The growth of the Indian food service industry is broadly driven by consumers and food service operators. The food market was estimated at Rs 75,000 crore last year and would reach Rs 1.37 lakh crore in 2015, according to data released at the Indian Restaurant Congress held in August last year.
Even as the number of PE deals increased from 23 in 2012 to 27 in 2013 in the food & agriculture sector, the amount invested dropped from $411 million to $247 million during the same period, according to data from EY, a consultant. But as private equity firms continue to chase theIndiaconsumption story, appetite for restaurant deals remains strong. "Over the years, there have been certain large investments in the restaurants and QSR sector," said Nangia, President, Technopak.
"If you see companies like Dominos owner Jubilant Foodworks and Mainland China's Speciality Restaurants, they have fared well in the capital markets over the years." PE funds such as Everstone Capital, SAIF Partners and New Silk Route are building dedicated platforms to make multiple investments in the sector. In 2013, Everstone entered into a $100 million deal with Burger King to become its master franchise in India, while SAIF Partners closed a deal with Delhi-based QSR Dana Choga's and NSR acquired majority stake in restaurant/cafe chain Moshe's
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1 Comment on this Story
Pawan Raj Kumar2424 days ago
Definitely great chain of restaurants in the portfolio. Should be a no brainer for any one interested in this space in India