‘Competition is good for all of us’

Coffee Day Enterprises, which owns the Café Coffee Day chain, will launch its IPO on October 14 to raise ₹1,150 crore, making it the largest IPO in the country since December 2012. Bloomberg TV India caught up with Cafe Coffee Day founder-owner VG Siddhartha, to find out the company’s future plans.

What prompted you to go public at this point?

In 2010, we raised money from three investors — KKR, Standard Chartered PE and New Silk Route. We told them in five-seven years we will go public. I have got another one-and-a-half years to go. I thought of creating some liquidity for them but still they are not selling. Maybe they have decided to sell in two or three years. But I want to create liquidity for them and that is why we are going public.

A lot of international chains have entered India. How do you see the competitive landscape changing?

Today, all competition put together, we are on 2,000 stores. Of that, 1,538 are ours. So that means all the competition put together we are four times bigger than them. I feel the international competition is good for all of us, as the market will grow. And second, as an opportunity we are looking at 30 per cent of India, and I don’t know if they may look at only 3-4 per cent of India. Our dream is to create a value India brand, an affordable luxury brand for India. We will have our own market and they will have their own market.

Several IPOs of late have not done well. Are you confident of getting good valuations?

We have filed ₹5,400-5,600 crore of value. And we are confident that a powerful home-grown brand will get support from everybody.

How many more Cafe Coffee Days will you open?

Because of the IPO I can’t give you projections. India will see 5,000 stores in five years, all brands put together. We don’t know how much Café Coffee Days we will have. But we are the market leader and we ought to be the market leader in the future also.

You have several different formats — Express, CCD Square, etc. In which format will you open the maximum number of stores?

Café Coffee Day is the regular format. That is the mind boggling opportunity. And Express, CCD Squares in hospitals, corporates, schools — it is a great opportunity.

But major growth will come in Cafe Coffee Day regular format and our vending business, selling coffee in offices.

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