Sapat open to tea brand buyouts

The Mumbai-based Rs 100 crore Sapat International is looking at fund-raising options for its growth plan, which includes the acquisition of a regional tea brand.

Nikhil Joshi, managing director, said the company would require a gradual infusion of funds as and when the plans were rolled out.

The company is also open to acquisition of regional tea brands or brands that would be complementary to its core portfolio. Parivar, the group's flagship brand, is among the fastest growing tea brands over the last few years.

Sapat has just launched Chai Time, a range of Indian flavoured teas in association with chef Sanjeev Kapoor. The group is keen on building the brand on the experiential platform, and is planning multiple initiatives around it.

It has also recently appointed Surjya Meher, formerly marketing head, Barista as vice-president, retail business. This, industry watchers, believe is that the company may be planning tea-bars, similar to coffee bars that have come up over the last few years.

Joshi declined to divulge further details on the future plans for Chai Time and the Sapat group, but mentioned that the plans would go beyond just cafes. Setting up a dedicated retail network is another possibility the group may look at.

The group has acquired rights to use the name chaitime.com, formerly a South Asian community portal and would soon be relaunching the site for its own brand.

Apart from India, Chai Time has also been simultaneously launched in the United States. "In the US, the brand will be available through 2,500 speciality food stores. After this we will set up distribution in the United Kingdom, followed by the South East," said Joshi.

Explaining the reason for tapping international markets, Joshi said the market for masala chai or spiced tea was estimated at $80 million (Rs 133 crore) globally, and at Rs 150 crore in India.

The group also has interests in pharmaceuticals (OTC brands), information technology and land development and construction. Joshi, however, ruled out plans of divesting the non-core businesses to fund the group's expansion in tea.