Coffee Day Enterprises files for IPO to raise up to Rs 1150 crore

To fund expansion, repayment of debt

Coffee Day Enterprises has filed a Draft Red Herring Prospectus with the Securities and Exchange Board of India (Sebi) to raise up to Rs 1150 crore from initial public offer (IPO). Coffee Day Enterprises' subsidiary Coffee Day Global is engaged in the retailing of coffee and other related products through its chain of restaurants under the Cafand Xpress kiosks formats under the brand name Cafe Coffee Day. As on 31 December 2014, the company had a network of 1,472 cafoutlets spread across 209 cities.

In addition to having the largest chain of caf in India, the company operates a vertically integrated coffee business which ranges from procuring, processing and roasting of coffee beans and retailing of coffee products across various formats.

The company's management team is led by promoter, V.G. Siddhartha, who has been a pioneer in the coffee business.

On consolidated basis, Coffee Day Enterprises reported a net loss of Rs 75.23 crore on revenue from operations of Rs 1759.75 crore for nine months ended 31 December 2014. The company reported a net loss of Rs 77.02 crore on revenue from operations of Rs 2281.93 crore for the year ended 31 March 2014 (FY 2014).

The company intends to use the proceeds of the IPO for financing coffee business expansion including setting-up of new restaurants, manufacturing and assembling of vending machines, refurbishment of existing CafNetwork outlets and vending machines and setting-up of a new coffee roasting plant facility along with integrated coffee packing facility and tea packing facility. The company also intends to use the proceeds of the IPO for repayment/prepayment of loans.

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