IVFA to invest $30 million in firm behind Indigo chain2 min read . Updated: 21 Jul 2015, 12:17 AM IST
The investment will help the company grow its restaurant franchise beyond the two metro cities of Mumbai and Delhi
Mumbai: DeGustibus Hospitality Pvt. Ltd, the company that owns and operates restaurant brands such as Indigo, Indigo Deli, Neel, Tote on the Turf and Moveable Feast on Monday announced that private equity investor India Value Fund Advisors (IVFA) will invest $30 million (around ₹ 190 crore) in the company.
The investment from IVFA will help the company grow its restaurant franchise beyond the two metro cities of Mumbai and Delhi, the firm said in a statement.
The firm operates 15 outlets in Mumbai and New Delhi in segments such as premium dining, casual dining and banquets.
DeGustibus was founded by renowned chef Rahul Akerkar in 1996.
“DeGustibus is one of the most consistent and reputed brands in the food services sector. It has a long-standing culture of excellence and delivering delightful experiences to consumers. It has a very strong talent pool of long-serving chefs and business managers, whom we are backing to grow the company," said Haresh Chawla, a partner at IVFA.
IVFA will help the company strengthen and grow its current brands by adding more outlets, and also introduce new concepts to penetrate new market segments.
According to Ravi Wazir, a hospitality business consultant based in Mumbai, investors are putting money in fine dining restaurants as they have realized that there is more to the Indian food and beverage space than just quick-service restaurants. “Customers are becoming more aware of the health benefits of freshly cooked meals. They value fresh food and are ready to pay more for it," he said.
The trend is not just limited to metro cities, he added. “Disposable incomes are on the rise in tier II and III cities, and there are large enough pockets of people in such towns who are exposed to such cuisines, creating significant demand for these fine dining restaurants to tap into," said Wazir.
According to the India Food Services Report 2013 by the National Restaurant Association of India and Technopak, Indian consumers spent over ₹ 12,800 crore in calendar year 2013 on food in the organized restaurant segment, which is estimated to be just 5% of the total market. The organized segment is expected to grow to ₹ 33,300 crore by 2018, or approximately 10% of the total pie, the report said.
The restaurant business, which witnessed a slowdown in the last couple of years, has seen cautious interest from private equity funds this year. Last week, Azure Hospitality, which runs the Mamagoto chain of restaurants, raised $10 million from Goldman Sachs.
On 23 June, Mint reported that a consortium of private equity funds is in advanced talks with Yum Brands Inc. to acquire franchise rights for west and south India for about $100 million as the owner of the KFC, Taco Bell and Pizza Hut fast-food chains seeks a deep-pocketed partner to execute its ambitious growth plans in these regions.