Restaurant chain Nandhana Palace in funding talks with Pulsar, others ahead of planned IPO

“The investment firm is evaluating a $50-60 million investment," one of the people said, adding that the transaction is likely to close in the coming weeks.

After publication of the story online, a Nandhana Palace representative clarified that its promoters are not in talks to sell the business but are in discussions with private equity firms including Pulsar to fund the next phase of growth for the business ahead of a planned initial public offer within two years.

“The promoters are not evaluating an exit at this stage and continue to focus on the company’s long-term growth," a company representative said on email, adding that it is seeking a valuation of about ₹2,000 crore.

The mid-market private equity firm has a strong footprint across India, West Asia and other emerging markets. Led by former TPG executive Vish Narain, Pulsar has backed several consumer-facing companies, including Biryani by Kilo and Blue Tokai, and earlier this year partnered with PJP Investments to bring Papa John’s Pizza to India.

Founded in 2004 by Ravichandar Ramaswamy, Nandhana Palace is among the more prominent Andhra-style restaurant chains, with multiple outlets across Bengaluru and Chennai. His daughters later joined the business with the aim of building what the company describes as a “tasty yet healthy food" brand that reflects the cuisine’s culture, environment and flavours.

In September, Mint reported that Nandhana was exploring a sale, part of a broader trend of restaurant chains and dessert brands considering exits amid rising investor interest. This has been supported by expectations of an imminent consumption boost following recent goods and services tax (GST) rate cuts, as well as a continued early-stage funding rush into consumer brands, leading to the emergence of several mid-sized players.

Together, these trends are fuelling more platform plays and inorganic growth opportunities, prompting brands in the ₹100-crore revenue bracket to scout for buyers to unlock their next phase of scale. Beyond private equity and venture capital firms, strategic investors and large food companies are also actively pursuing acquisitions.

Mint also reported in August that Temasek-backed Haldiram Snacks Food Pvt. Ltd is exploring bolt-on acquisitions to expand its pan-India presence, particularly in southern India. Bankers have been asked to identify profitable assets with strong fundamentals. A bolt-on strategy allows larger companies to acquire smaller businesses to expand operations, diversify offerings or enter new markets.

Similarly, Chryscap has earmarked $200 million to create a desserts platform following its acquisition of Theobroma. The private equity firm is evaluating assets in frozen desserts and ice cream categories as part of a bolt-on strategy, with Theobroma as the anchor brand.

Meanwhile, the Nandhana group, which operates 27 outlets, is gradually expanding into other Indian cities. The company says it has grown consistently by offering a range of formats, from fine dining to indoor parties, according to its website.

Nandhana Foods Pvt. Ltd, which operates the chain, reported consolidated revenue of ₹241 crore in FY24, up from ₹188.3 crore a year earlier, and a profit of ₹12.3 crore compared with ₹3.9 crore in FY23, according to Ministry of Corporate Affairs filings sourced from Tofler.

India’s food services market was valued at about $80 billion in 2024 and is expected to grow at a compound annual rate of 10-11% over the next five years, with the organised sector leading the expansion, Redseer said in a report earlier this year. Growth is being driven by a surge in online food delivery and a rise in organised dine-in formats, with restaurant chains benefiting from consumers’ increasing preference to eat out.

(An earlier version of this mentioned that the fund-raising would provide for an exit to the promoters.)