Coffee Day group reignites talk to acquire an investment bank

Coffee Day group, the Bangalore-based coffee retailing to wealth management diversified group, is understood to have restarted a move to acquire an boutique investment bank. The group, which has a growing presence in the stock and commodity broking and wealth management space, is understood to have initiated talks with at least three boutique investment banks to get into space.

This is the second time around that Coffee Day Group, promoted by V G Siddhartha, is trying to get into the investment banking space. During 2008, Way2Wealth, the wealth management & financial services arm of Coffee Day Group, was in advanced talks with Mape Advisory Group for a joint venture, which did not fructify. Prior to this, First Global led by Shankar Sharma had planned to acquire Way2Wealth which also did not sail through.

According to investment bankers close to Coffee Day Group, Coffee Day Group may be looking at a target which will cost them between Rs 200-300 crore. Coffee Day Group officials did not respond to queries on this move.

Ever since the move to acquire Mape did not fructify, Siddhartha has been aggressively looking to ramp up Way2Wealth and had attracted senior talent from the then IL&FS Investmart to build and expand this business. Way2Wealth has now around 550 franchisees and is looking to add another 200 by end of Fy12. Way2Wealth recently acquired Mumbai-based Techno Shares and Stock Limited, which has a strong presence in the West and East India. Prior to this move, Way2Wealth roped in Ambareesh Baliga, a well-known name in the Indian stock market, to spearhead institutional and wealth management business.

Siddhartha, who started his career at J M Financial Services, has during the past decade leveraged on the Indian growth story and built a integrated coffee retailing chain, which is now the largest in India. In addition to having a presence in coffee retailing, Coffee Day Group owns expansive estates spread over nearly 10,000 acres of coffee estates which fuel the coffee bean exports business.

Siddhartha in addition to this sector is building a presence in furnitures, food processing, hospitality, commercial realty, logistics besides waste management. Known for his shrewd investment acumen, Siddhartha had also started a technology incubation fund along with Bank of America and has investments in MindTree, Ittiam besides a few others.

During early last year, Coffee Day Group raised a record $200 million for marquee private equity investors such as KKR, Standard Chartered Private Equity and New Silk Route.