The Economic Times
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| 07 March, 2021, 02:49 PM IST | E-Paper

ITC considering to pick stake in Coffee Day


Deliberations are at preliminary stage and may not lead to a formal offer.



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By Baiju Kalesh, Anto Antony and P R Sanjai

Ltd., Asia’s largest cigarette maker by market value, is considering a bid to buy a stake in Coffee Day Enterprises Ltd. as it seeks to diversify away from tobacco products, according to people familiar with the matter.

The maker of Classic and Gold Flake cigarettes has been given access to Coffee Day’s assets and financial for due diligence, said the people, who asked not to be identified as the discussions are private. ITC could be vying with Coca-Cola Co., which has evaluated India’s biggest cafe chain but hasn’t made a formal offer, said one of the people.

A successful bid will help ITC further diversify its business to reduce dependence on cigarettes as India raises taxes on tobacco and restricts smoking in public places. Coffee Day is under pressure to pare borrowings after its founder V.G. Siddhartha took his own life as debt strains began to emerge in his companies.

Deliberations are at preliminary stage and may not lead to a formal offer, according to the people. ITC received an inquiry from an intermediary on Coffee Day and there has been no progress, its spokesman said in response to Bloomberg query. Coffee Day declined to comment.

Coffee Day has about 1,700 outlets, ten times more than what Starbucks Corp. runs in the world’s second most populated country, according to the National Restaurant Association of India. A unit of private equity firm KKR & Co. owns 6.07 per cent of the company. Standard Chartered Private Equity holds 5.7 per cent, while Nandan Nilekani, co-founder of Infosys Ltd., has a 2.69 per cent stake.
( Originally published on Aug 21, 2019 )
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9 Comments on this Story

Niveza Equity Research563 days ago
Diversified product conglomerate, ITC is in focus today with its likely bid for CCD . The ITC stock seems potential in long term and this deal, if happens, will be an added advantage for the ITC for market expansion along with new segment. The stock is expected to fetch eye-catching growth in 3-5 years backed by significant progress by its various segments. In addition to its bread-winner Cigarette segment, its non – Cigarette sections comprising FMCG, Hotel as well as Agri and paper are also tend to show high performance in near future backed by significant demand augmentation and innovations by company. The fundamentally strong stock is expected to perform good in long term. Search Google for NIVEZA FREE Share Market Tips today.
Alpha 563 days ago
Prince Gw563 days ago
Excellent move.
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