Financing and mergers and acquisitions return as the food industry returns to pre-Covid levels

New Delhi: Investor interest, fundraising and mergers and acquisitions are back in vogue dine well, fast service Other coffee sector in the midst of the industry’s rebirth after two years of downturn induced by the pandemic which brought the industry to a halt, executives said.

Ashish Kapur, promoter of Whiskey Samba and premium bar chains The Winery, said the group has set aside a corpus of Rs 150-200 crore to acquire a mix of top-tier regional and international brands. “We are seeing that the consumption matrix is ​​evolving and people are consuming more and with larger tickets.”

At least a dozen deals are in the process of negotiation or early closing, and interest in financing has been garnered by private equity traders, as well as established chains looking to inorganic growth with small business acquisitions, start-ups or cloud kitchens in the year.

“We are running four mandates right now between casual dining and quick service restaurants; there is a renewed interest from private equity funds in the food services sector, “said Siddharth, head of investment banking firm Lodha & Co in India.” In addition, larger brands are considering acquisitions to increase as market interest and valuation multiples increase “.

Riyaaz Amlani, chief executive of Impresario Handmade Restaurants, which owns Social and Smoke House Deli, said that while there is still some degree of caution about very rapid expansion, investor interest is back on track. “We are in talks with several private equity players to raise funds and inorganic opportunities,” Amlani said, declining to specify details claiming the negotiations are clandestine.

The Rs 4.2 lakh crore food service industry, which has seen the permanent closure of more than 25% of restaurants and has been among the hardest hit since the start of the pandemic amid mass closures, limited opening hours and limits serving alcohol, it has recovered from pre-covid numbers which is attracting investors, some executives said.

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Wow Momo Foods, backed by Tiger Global, is in advanced talks to close funding in the Rs 150-200 crore range over the next four to five weeks, QSR chain co-founder Sagar Daryani said. “We are expanding rapidly across our three brands to increase our nationwide presence over our existing 450 stores,” said Daryani.

ET has learned that alcobev chain The Beer Cafe is also raising a new round of funds to be announced soon. Beer Cafe founder Rahul Singh declined to comment on the upcoming development.

Zorawar Kalra, chief executive of Massive Restaurants, which manages the Masala Library and Farzi Cafe, said, “The industry has recovered better than pre-covid numbers and took both operators and investors by surprise. The purchase of well-managed food and beverage outlets in small outlets, led by the founders through acquisitions, is certainly the flavor of the season. ”

Another senior executive at an investment banking firm said it is executing two active mandates for restaurant start-ups from foreign investors betting on the revival of Indian consumer history.

“We may seek investment whenever we have a good opportunity to acquire an existing brand or business and feel the need for a substantial capital infusion,” said Anurag Katriar, founder of Indigo Hospitality.

Delivery-only or cloud platforms have also revived. Full-stack foodtech platform FreshMenu said it will spend over Rs 20 crore on expansion, sub-brand growth and private label introduction, after closing a new $ 7 million funding round from the growing corporation. risk in the Florintree Advisors phase. FreshMenu CEO Rashmi Daga “There are great opportunities to exploit within the private label space; we will expand with more new brands internally in different kitchens. ”

Others like Tim Hortons, Canada-based coffee shop and chain QSR, which will debut its first store in India next month, have signed a major franchise agreement with AG Cafe, the joint venture between the retail group of fashion and lifestyle Apparel Group and Gateway Partners investment manager.

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