Mumbai: Massive Restaurants Pvt. Ltd, owned by celebrity food writer and chef Jiggs Kalra and his son Zorawar, is in talks with private equity fund Gaja Capital to raise about Rs80-100 crore to meet its expansion plans, according to two people familiar with the development.
Private equity firm Everstone Capital already owns a significant minority stake in Massive Restaurants.
In this proposed fundraising, Everstone and the promoters will dilute 10% each at a valuation of Rs400 crore, said one of the two people cited above.
Yes Bank is advising Massive Restaurants in raising the latest fund.
Founded in 2012 by Zorawar Kalra in partnership with Mirah Group, the owner of Rajdhani Thali and QSR chain Falafels, Massive Restaurants operates five verticals of premium fine-dining restaurants: Masala Library, Made in Punjab, Farzi Café, Pa Pa Ya and MasalaBar.
With this proposed fund, Massive Restaurants plans to expand its footprint into more cities in India as well as in the Middle East and Europe, said the second person on condition of anonymity.
Mail and text messages sent to Zorawar Kalra did not elicit any response while a spokesperson for Everstone declined to comment. “We have evaluated various investment opportunities in the F&B sector but we are unable to comment on specific ones," said Gopal Jain, managing partner at Gaja Capital, without disclosing further details.
In 2015, F&B Asia Ventures Ltd, a pan-Asian food and beverage business platform controlled by Everstone Capital, had invested up to Rs85 crore in Massive Restaurants, thus acquiring a large minority stake.
Everstone Capital has invested Rs1,200 crore in F&B Asia, which has in its fold assets such as Pind Balluchi, Harry’s, The Disgruntled Chef, as well as the franchises of Domino’s in Indonesia and Burger King in India and Indonesia.
Founded in 2004, Gaja Capital primarily focuses on the consumption segment and manages assets of about $500 million across its three investment vehicles.
The PE firm made the final close of its third fund Gaja Capital III at $240 million in March last year.
In the F&B space, Gaja has two investments: Bakers Circle, producer and supplier of frozen bakery/dessert products to major quick service restaurant chains including Subway, Domino’s, KFC and Pizza Hut; and Bengaluru-based John Distilleries which sells Original Choice, one of the largest selling whiskys in the world.
“Eating out as a trend is irreversible and it is only going to increase with younger, richer and urban Indians," said Harminder Sahni, founder and managing director of consulting firm Wazir Advisors.
“With every new launch and passing year, the space for new entrants is reducing and cost of entry increasing so everyone is trying to land grab. Even though at this moment they may not be making money from every location but the fear of losing opportunity and market share is driving them to raise funds and PEs to invest in," Sahni added.
India’s food services industry will be worth Rs4.98 trillion by 2021, according to a report by the National Restaurant Association of India (NRAI), released last year.
The size of the total market, both organized and unorganized, was Rs3.09 trillion in 2016 and NRAI’s estimates take into account a 10% compound annual growth rate (CAGR).