CCD’s non-consumer biz may be hived off pre-IPO

BANGALORE: India's bean king V G Siddhartha could potentially demerge his non-consumer businesses, as the 54-year-old billionaire readies ground for a public listing of his coffee retailing operations by early next year, multiple sources familiar with the developments said.

In just over two decades, Siddhartha has built a business empire spanning F&B retail ( Cafe Coffee Day), real estate (Tanglin), hospitality (Serai), financial services (Way2Wealth) and logistics (Sical). He has attracted marquee investors such as Kohlberg Kravis Roberts (KKR), New Silk Route and Standard Chartered Private Equity in his holding entity, which now look at a potential exit opportunity with the IPO.

The holding company, Coffee Day Resorts, is likely to be renamed as part of the preparations for the listing. Data sourced from the ministry of corporate affairs said that Siddhartha and his wife own a 59% stake in the holding company, with the three big global investors owning 32.95%. Another foreign investor owns 3.51% while other family members holding the residual shares.

Investment bankers and investors believe a standalone consumer story, powered by the Cafe Coffee Day brand, would fetch better valuation multiples, than a conglomerate play.

This could mean Siddhartha carving out a separate holding company for his infrastructure and other investment interests. However, TOI could not ascertain if the consumer business part would also include the hospitality and financial services businesses.

An e-mail and text message sent to Siddhartha didn't elicit any response.

Last month, Bloomberg reported that Siddhartha was considering an IPO. Siddhartha, who has formed an internal committee to explore all options regarding listing, is eyeing a market capitalization of at least $1 billion. The first generation entrepreneur has pushed for a group listing with an eye on the market value, and is still debating possibilities of an overseas listing.

"But we have said that Coffee Day is a big Indian consumer brand, and should ideally be listed on domestic exchanges," a source mentioned earlier said. KKR, New Silk Route and StanChart had valued the holding company at around $575 million, while investing together $225 million four years ago.

A listing has been on the cards of some years now, but it gained momentum since the arrival of USbased Starbucks last yearand is now been given a further push by bullish market sentiments.