Deals are back on dining tables in India again

Investor interest, fundraising and mergers and acquisitions are back in the fine-dine, quick service and cafes sector amid industry revival after two years of pandemic-induced downturn, which brought the sector to a standstill, executives said.

Ashish Kapur, promoter of premium bar chains Whisky Samba and The Wine Company, said the group has set aside a corpus of ₹150-200 crore for acquiring a mix of upscale regional and international brands. "We are seeing that the matrix of consumption is evolving, and people are consuming more, and with higher ticket sizes."

At least a dozen deals are in stages of negotiations or advanced closure, and interest has picked up from private equity players for funding, in addition to established chains looking at inorganic growth with buyouts of small-sized businesses, startups or cloud kitchens in the year.


"We are running four mandates right now across casual dining and quick service restaurants; there is renewed interest from private equity funds in the food services sector," said Siddharth Bafna, lead at investment banking firm Lodha & Co in India. "In addition, larger brands are looking at acquisitions to scale up as market interest and valuation multiples pick up."

Riyaaz Amlani, managing director of Impresario Handmade Restaurants, which owns Social and Smoke House Deli, said though there is still some degree of caution on very rapid expansion, investor interest is very much back on track. "We are in talks with multiple private equity players for fundraise and inorganic opportunities," Amlani said, declining to specify details saying negotiations are underway.

The ₹4.2-lakh-crore food services industry, which saw permanent closure of over 25% restaurants and was among the worst-impacted with the onset of the pandemic amid mass shutdowns, limited operating hours and curbs on serving alcohol, has revived over pre-Covid numbers which is attracting investors, some executives said.

Tiger Global-backed Wow Momo Foods is in advanced talks to close funding in the range of ₹150-200 crore in the next 4-5 weeks, the QSR chain co-founder Sagar Daryani said. "We are expanding across our three brands rapidly, to increase our national footprint up from our existing 450 stores," Daryani said. ET has learnt that alcobev chain The Beer Cafe too is raising a fresh round of funds, which will be announced soon. The Beer Cafe founder Rahul Singh declined to comment on the upcoming development.

Zorawar Kalra, managing director at Massive Restaurants, which runs Masala Library and Farzi Cafe, said: "The industry has bounced back better than pre-Covid numbers, and has taken both operators and investors by surprise. Buying into well-run, founder-driven smaller food and beverages outlets through acquisitions is definitely the flavour of the season." Another top executive at an investment banking company said he is running two active mandates for restaurant startups from overseas investors betting on the revival of India's consumption story.

"We may be seeking investments whenever we get a good opportunity to acquire an existing brand or company and feel the need for substantial equity infusion," said Indigo Hospitality founder Anurag Katriar.

Delivery-only, or cloud platforms too have perked up. Full-stack foodtech platform FreshMenu said it will spend over ₹20 crore on expansion, scaling up sub-brands and introducing private labels, having closed a fresh round of funding of $7 million from growth-stage venture capital firm Florintree Advisors.