The Gurgaon-based company, which runs the Indian-themed Masala Library, Made in Punjab and Farzi Cafe chain of restaurants and cafes, has appointed leading Mumbai-based investment bank Lodha Capital Markets to run the mandate and is believed to be in discussions with a number of marquee private equity firms that have a strong focus on the F&B space.
If successful, the transaction, which, according to multiple sources with knowledge of the talks, could close in the next 60 days, will be the latest in a series of deals in the sector.
In April last year, Ajay Relan-led CX Partners invested Rs 110 crore in casual dining chain Barbecue Nation, while New Silk Route, which has invested in Bangalore-based Vasudev Adiga's Fast Food, also invested an undisclosed amount in Mumbai-based Moshe's last September, a deal also structured by Lodha Capital Markets.
“Apart from the huge potential, the F&B sector can also act as a surrogate for other retail businesses where PE is not allowed to invest,“ said Jacob Kurian, partner, New Silk Route.
Both, Zorawar Kalra, managing director of Massive Restaurants and Siddharth Bafna, head of corporate finance and transaction services practice at Lodha and Co, declined to comment.
Massive Restaurants, which is promoted by Kalra, his father Jiggs Kalra, India's first celebrity chef and food writer, and the Mirah Group, is expected to use the proceeds from any deal to expand across the country, and in overseas markets, such as the United States, United Kingdom and the Middle East.
“They are looking to open up to eight restaurants per year for the next four years, and are targeting a top-line of about Rs 300 crore at the end of that period,“ said one of sources on the condition of anonymity.
While there is no exact thumb rule to determine valuations in the F&B space, it is typically calculated by taking multiples of between two and three times a company's revenue.
In an earlier chat with ET, Kalra had said that Massive Restaurants' annualised revenue run-rate was about Rs 30 crore for the current financial year. A potential transaction, therefore, could value the company at about Rs 60 crore to Rs 90 crore.
This is the second venture founded by the father-son duo.
In 2007, they had tied up with Dabur Group scion Amit Bur man's Lite Bite Foods, to form Wrapster Foods, which ran restaurant chain Punjab Grill, among other, before exiting in 2012.
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1 Comment on this Story
Neil Mmm2333 days ago