<div><em>In the last seven and a half months (Jan-August) in the current calendar year, as many as 13 investments have been sealed in the sector, reports <strong>Paramita Chatterjee</strong></em></div><div> </div><div> </div><div>Indian restaurant chain Barbeque Nation recently raised over Rs 100 crore from private equity firm CX Partners. Founded in 2006 by Sayaji Hotels, the restaurant offers buffet meals with a concept of in-table grilling. This, in fact, is the second round of funding from CX Partners in Barbeque Nation. It first invested in the restaurant chain in April 2013.</div><div> </div><div>The investment comes close on the heels of global financial services giant Goldman Sachs’ investment in Delhi-based Azure Hospitality that owns pan-Asian restaurant brand Mamagoto, two quick service restaurant chains Rollmaal that sells Indian street food and Speedy Chow which serves Thai and Chinese comfort food. Azure also runs catering brand Mamapaati, which currently operates in two markets -- Delhi NCR and Mumbai.</div><div> </div><div>As more Indians with higher disposable income take to dining out, the hitherto-fragmented restaurant market is set to become an attractive investment area for risk capital investors, say analysts. “With the culture of dining out picking up in India with changing lifestyle and increased disposable income, this is one space which is definitely garnering a lot of investor attention,” says Raja Lahiri, partner at advisory services firm Grant Thornton.</div><div> </div><div>According to consultancy firm Technopak Advisors, the Indian food-service industry is estimated to grow to $78 billion by 2018 from its current level of $48 billion, registering a compounded annual growth rate of 11 per cent.</div><div> </div><div>The money raised by restaurant chains is increasingly being used to expand operations across the country and sometimes even in the domestic market. Rahul Khanna, Co-founder and Director at Azure, said: “The India consumption story is strong and going forward, we definitely want to cash in on it.” What’s more, “India’s young, billion-plus population is undergoing a revolution in terms of experimentation with diverse cuisines, driven by online and mobile food ordering services,” he added.</div><div> </div><div>The latest data available from research firm Venture Intelligence probably explains the rush of investor money into restaurant chains. In the last seven and a half months (Jan-August) in the current calendar year, as many as 13 investments have been sealed in the sector, more than double of what was in the corresponding period last year. In the Jan-August period in 2014, there were a mere 5 deals worth $45 million. In terms of deal size, the total amount that private equity and venture capital funds have invested so far in 2015 amounts up to $123 million, as per research firm Venture Intelligence.</div><div> </div><div>Risk capital investors are increasingly queuing up to invest in restaurant chains, signalling a strong vote of confidence in the India consumption story. Other prominent investment deals in the last few months in the sector include Samara Capital’s $32 million investment in Pizza Hut Franchise and India Value Fund’s $30 million capital infusion in Indigo Delicatessen. Further, the sector has also witnessed a few smaller deals. For instance in the month of July, Faasos Food Services, a technology-focused quick-service restaurant chain, raised as much as $16 million from Sequoia Capital and Lightbox. Similarly, Massive Restaurants, a two-year-old company established by Zorawar, son of celebrity chef Jiggs Kalra, too sold half of its stake to Everstone Capital. The list is just endless.</div><div> </div><div>Besides, the overall investor interest in the food and restaurant sector has also increased significantly after the listing of Speciality Restaurants, which owns brands like Oh! Calcutta and Mainland China and the IPO of fruit drink manufacturing company, Manpasand Beverages. Earlier, Jubilant Foodworks that runs the fastfood retail chain under the Dominos pizza brand in the country hit the capital market giving an exit to its then investor JP Morgan.</div><div> </div><div> </div>
