Wanna get our awesome news?

Subscribe to our newsletter!


Actually we won’t spam you and keep your personal data secure

As the voice of the Indian restaurant industry, we represent the interests of 500000+ restaurants & an industry valued @ USD 4 billion. Whether a chain or independent restaurant, the NRAI is here to help every step of the way. Join us!


Sapphire may raise Rs 400 crore from private equity


MUMBAI: Sapphire Foods, the company that owns more than 300 outlets of Pizza Hut and KFC in South India and Sri Lanka is looking to raise $60 million or Rs 360-400 crore from private equity investors to fund its new store expansion plans.

The company, owned by a consortium of PE investors such as Samara Capital, CX Partners, Goldman Sachs and IDI Emerging Markets Fund, is being valued at around $250-300 million, said people with direct knowledge of the development.

In 2015, the consortium led by Samara Capital had consolidated the Southern India stores of Yum Foods, the company that owns the brands KFC, Pizza Hut and Taco Bell. These stores were being operated through five different franchise’s. The 300 plus stores were valued around Rs 750 crore at that time.

Today, the company is being valued at around $250-300 million, said three people with direct knowledge of the development.

“The fund raise will be largely primary and the existing investors will decide on monetising part of their stake based on the incoming offers,” said a person involved in the deal.

The company that is now EBITDA positive has seen its same store sales grow by more than 10 per cent year on year in the last three years. “The company is looking at adding 50 new stores this year and the capital raised from new investors will fund the expansion,” said another person involved in the deal. Emailed queries sent to the spokesperson of Samara Capital did not elicit any response.

Last year, Yum Foods consolidated and streamlined its operations in India under three franchises. The first one is Ravi Jaipuria owned RJ Corp. that owns around 300 stores; around 100 stores are directly operated by Yum Foods and the remaining 300 plus stores are held by Sapphire Foods.

Denimwear maker Levi Strauss’ managing director Sanjay Purohit joined Samara Capital as a partner to look after its consumer businesses, ET had reported last year.

Purohit looks after Samara’s investee companies including Flemingo Duty Free, Monte Carlo Fashions, Guardian GNC, Paradise Foods, and Sapphire Foods.

For Samara Capital that is on an exit mode for most of its investments, Sapphire could bring in some early earn out if the valuation offered by incoming investor is right.

Although the current fund raise is primary, industry experts say a part secondary sale cannot be ruled out. The fund has invested around $412 million since 2007, data from Venture Intelligence shows. Some of Samara Capital’s other investments include RBL Bank, Thyrocare, Paradise Food, Sharekhan and Monte Carlo.

The fund has already exited its investments in Guardian Lifecare, Asian Oilfields, Sharekhan and Monte Carlo. According to a KPMG report in November 2016, full service and quick service restaurants together amount to around 73 per cent of the food service industry in India.

Source:  The Economic Times

Recommended for you