Coffee Day files DRHP for Rs 1,150-cr IPO

2nd firm after RBL Bank to do so for over Rs 1,000 cr this week; GVK Airport, IndiGo IPOs also likely soon

Coffee Day Enterprises, which owns the Cafe Coffee Day (CCD) chain of restaurants, filed a draft red herring prospectus (DRHP) on Friday for an initial public offering (IPO) of shares worth Rs 1,150 crore.

Kotak Investment Banking, Citigroup, Morgan Stanley, Axis Capital, Edelweiss and YES Bank are handling the IPO.

It is the second company to have filed an offer document with the Securities and Exchange Board of India (Sebi) this week for an IPO over Rs 1,000 crore. RBL Bank (earlier Ratnakar Bank) also filed a DRHP, to raise Rs 1,100 crore by issue of fresh shares and also a secondary sale of 13 million shares by private equity (PE) investors, including Beacon India.

COMPANIES WITH SEBI APPROVAL FOR IPOS

• ACB (India)
• AGS Transact Technologies
• Amar Ujala Publications
• Dilip Buildcon
• Lavasa Corp
• Navkar Corp
• Power Mech Projects
• Prabhat Dairy
• Rashtriya Ispat Nigam

According to investment banking sources, GVK Airport Developers, IndiGo and L&T Infotech are among the major companies in the process of filing offer documents with Sebi.

The IPO of GVK Airport, which runs airports at Mumbai and Bengaluru (second and third busiest in India, respectively) and is also developing airports at Bali and Yogyakarta in Indonesia, is expected to be at least Rs 3,000 crore. That of IndiGo, the country’s biggest airline by market share, is likely to raise Rs 2,500 crore for a 10 per cent stake.

L&T Infotech, the software arm of engineering major Larsen & Toubro, plans to hit the market by the end of this year, chairman A M Naik had said this week. Lavasa Corporation is expected to hit the market with an IPO, to raise Rs 750 crore, before September.

In March, Coffee Day did a pre-IPO funding, valuing it at Rs 6,200 crore, where five investors — Nandan Nilekani, Rare Enterprises (owned by ace investor Rakesh Jhunujunwala and Ramesh Damani, among others — invested Rs 100 crore in the company.

KKR, the private equity major, has also invested in Coffee Day. The latter plans to use Rs 633 crore for debt repayment and the rest of the money for growth. Coffee Day has consolidated debt of Rs 2,860 crore on account of losses incurred in the three financial years to March 2014.

For the nine months ended December 2014, its consolidated revenue was Rs 875 crore and net loss was Rs 11 crore. Net profit had fallen from Rs 11 crore in FY11 to Rs 0.6 crore in FY12 and Rs 0.1 crore in FY13. Owing to slowing consumption demand, it reported a net loss of Rs 9 crore in FY14. Revenue, though, grew from Rs 954 crore in FY11 to Rs 1,144 crore in FY14. It, however, remains profitable at the Ebitda (earnings before interest, taxes, depreciation and amortisation) level, with an Ebitda margin of 16.4 per cent in FY14 and 17 per cent in the first nine months of FY15.