BackCoffee Day delivers 2.6% return to KKR
In 2010, the private equity firm invested ₹360 crore to purchase just over a fourth of the owner of the Cafe Coffee Day chain In 2018, it sold a 5.9% stake for ₹405 crore, pulling out a little more than the capital it had invested in the company
PremiumCoffee Day Enterprises Ltd has handed out a 2.6% annualized return on paper for the 12-year bet of KKR & Co. Inc., going by the Wednesday price at which the US private equity firm made a partial exit from the owner of the Cafe Coffee Day chain.
In terms of multiple of invested capital, Coffee Day Enterprises has bumped up KKR’s bet by 1.23 times, according to VCCircle estimates.
After selling a 0.9% stake for ₹5.6 crore, KKR will hold 5.17% of Coffee Day Enterprises.
In 2010, the private equity firm invested ₹360 crore to purchase just over a fourth of the owner of the Cafe Coffee Day chain. In 2018, it sold a 5.9% stake for ₹405 crore, pulling out a little more than the capital it had invested in the company.
At the time, its total investment had almost doubled generating close to 10% annualized return.
In 2019, the coffee chain’s founder V.K. Siddhartha, who came under pressure from lenders, investors and tax authorities, was found dead. Since then, the shares of Coffee Day Enterprises have lost more than 95% of their value, tumbling down from a high of more than ₹360 to less than ₹30 apiece.
KKR declined comment.
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