L Catterton invests in restaurant operator Nandhana Foods

L Catterton, a global consumer-focused investment firm, will invest in Nandhana Foods, a restaurant group specializing in South Indian cuisine, the companies said in a statement on Wednesday.

The deal size is pegged at about $30 million ( ₹288 crore) for a minority stake in the company, a person familiar with the matter said. In May, Mint first reported on the round, expected at a valuation of about ₹2,000 crore.

The investment will support Nandhana’s next phase of growth and enable the group to achieve greater scale by leveraging L Catterton’s industry expertise and operating capabilities.

“Nandhana Foods’ founding family has built a distinctive and scalable business with a strong consumer proposition and attractive unit economics. It has expanded the business in a disciplined manner and ensured that its restaurants remain anchored in high quality and consistency,” said L Catterton partner Vikram Kumaraswamy. “There is significant headroom for additional growth by further deepening and broadening its presence in South India and penetrating other markets. There is a clear path for prudently ramping up expansion.”

L Catterton has significant experience in building restaurant brands across the world. The firm has invested in about 30 restaurant businesses till date, with current and past portfolio companies in the space including Dishoom, P.F. Chang’s, Velvet Taco, Baja Fresh, Cheddar’s Scratch Kitchen, Cigierre, HUGE, Impresario and Mendocino Farms.

Food services market

South Indian cuisine is one of the largest segments of India’s burgeoning food services market. Propelled by secular trends such as the rising per capita expenditure on dining out and food delivery services, as well as the increasing number of consumption occasions, the segment is expected to witness strong growth, the company said.

Bengaluru-based Nandhana Foods has offered authentic South Indian cuisine for more than three decades, with a focus on taste, authenticity, food quality, freshness and menu variety. It is known for its unique and customizable spice profile that has helped the chain cultivate a loyal customer base.

The company serves vegetarian and non-vegetarian Andhra dishes across 27 restaurants in Bengaluru and Chennai, according to its website.

L Catterton has a profound grasp of Nandhana’s organizational DNA and an intricate understanding of the restaurant industry, said founder and managing director Dr R. Ravichandar.

“We are excited about tapping into its astute insights and proven know-how to strengthen our operations in line with our commitment to providing high-quality food and service to our customers,” he added.

Advay Capital Advisors advised Nandhana on the transaction.