MUMBAI: Consumer-focused private equity firm L Catterton, among others, is in talks to acquire a stake in Bengaluru-based restaurant chain Nandhana Palace, three people familiar with the matter said.
“The investment firm may likely acquire a minority stake in the business,” one person said.
“The Andhra-cuisine restaurant chain is also in discussions with other funds, but L Catterton may likely have an edge, given its deep expertise in the consumer sector,” a second person said.
Mint reported in December that Nandhana had sought a valuation of ₹2,000 crore when it was in talks with Dubai-based investment firm Pulsar Capital, but that did not materialize.
That valuation was at the higher end and may evolve or change, depending on the buyer, two of the people said.
“While the final terms are yet to be signed, the deal is still undergoing due diligence,” a third person said.
L Catterton and Nandhana did not respond to Mint’s requests for comment till the time of publishing.
L Catterton is 60% owned by private equity firm Catterton and the remaining 40% is jointly owned by French luxury brand LVMH and Groupe Arnault. The firm manages $40 billion of equity capital and has made over 300 investments in consumer brands globally and in India.
Its portfolio companies include Drools, Sugar Cosmetics, Farmley, Haldiram’s, Healing Hands Clinic and Jio Platforms. L Catterton India is led by former Hindustan Unilever chief Sanjiv Mehta.
Nandhana Palace, founded in 2004 by Ravichandar Ramaswamy, is an Andhra-style restaurant chain with 27 outlets across Bengaluru and Chennai. Ramaswamy’s daughters later joined the business to build what the company described as a “tasty yet healthy food” brand that reflects the cuisine’s culture, environment and flavours.
The Nandhana group is expanding to other Indian cities. The company said it has grown 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 ₹316.1 crore in FY25 from ₹218.1 crore a year earlier and a profit of ₹28.2 crore compared with ₹11.9 crore in FY24, according to ministry of corporate affairs filings sourced from Tofler.
Broad trend
Nandhana’s fundraising attempts are part of a broader trend of investor interest in restaurant chains and dessert brands. This has been supported by expectations of a consumption boost following the goods and services tax rate cuts in September and a continued early-stage funding rush into consumer brands, leading to the emergence of several mid-sized players.
Restaurant and QSR chains that are in talks to raise or have already raised capital include Truffles Hospitality, Trimex Foods (from Siguler Guff), Burma Burma and Burger Singh, Mint has reported.
Sapphire Foods India, which operates KFC & Pizza Hut in India, is preparing to merge with Devyani International in an almost billion-dollar deal. Devyani has said it plans to acquire local chain Biryani by Kilo, while Wow! Momo raised capital from Singularity in December. Mint has reported on Subway India’s plans to tap the public markets and on Bengaluru-based The Filter Coffee raising capital from the family office of Bikaji’s promoter earlier this month.
These trends are 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 pursuing acquisitions. Mint reported on Haldiram’s and Theobroma exploring such moves.
India’s food services market was valued at about $80 billion in 2024 and is expected to grow at a compounded annual rate of 10-11% over the next five years, with the organized 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 organized dine-in formats, with restaurant chains benefiting from consumers’ increasing preference to eat out.