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Last updated: 08 Oct, 2015  

Coffee Day Enterprises Limited Public Issue Opens on Oct 14

NewsVoir | 07 Oct, 2015
Coffee Day Enterprises Limited (the “Company”) is proposing to open on October 14, 2015, a public issue of Equity Shares of Face Value of Rs. 10 each (“Equity Shares”) for cash including a share premium aggregating up to Rs. 11,500 million (the “Issue”). The Issue comprises a net Issue to the Public (the “Net Issue”) and a reservation of Equity Shares aggregating up to Rs. 150 million for subscription by eligible employees (the “Employee Reservation Portion”).

 

The Price Band has been fixed from Rs. 316 to Rs. 328 per Equity Share. The minimum Bid lot is 45 Equity Shares and in multiples of 45 Equity Shares therein.

 

The Equity Shares offered through the Issue are proposed to be listed on the BSE Limited and the National Stock Exchange of India Limited. 

 

The Global Co-ordinators and Book Running Lead Managers (“GCBRLMs”) to the Issue are Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited and Morgan Stanley India Company Private Limited. The Book Running Lead Managers (“BRLMs”) to the Issue are Axis Capital Limited, Edelweiss Financial Services Limited and YES Bank Limited.

 

The Issue is being made in accordance with Regulation 26(1) of the SEBI ICDR Regulations, through the Book Building Process wherein 50% of the Net Issue shall be Allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”), provided that the Company may allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third shall be reserved for domestic Mutual Funds only, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor Investor Issue Price, in accordance with the SEBI ICDR Regulations. 5% of the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Issue Price. All potential investors, other than Anchor Investors, may participate in this Issue through an Application Supported by Blocked Amount (“ASBA”) process providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”).

 

Coffee Day Enterprises Ltd. (“CDEL”) is the parent company of the Coffee Day Group, which currently operates in businesses such as coffee, development and management of IT-ITES technology parks, providing integrated logistics solutions, financial services, hospitality and investing in technology companies. The Company is engaged in the coffee business through the subsidiary, Coffee Day Global Limited (earlier known as Amalgamated Bean Coffee Trading Company Limited) (“CDGL”) and its subsidiaries. It is also engaged in coffee trading through CDEL and Coffee Day Trading Limited. In addition to having the largest chain of cafés in India, it operates a highly optimized and vertically integrated coffee business which ranges from procuring, processing and roasting of coffee beans to retailing of coffee products across various formats. The Company opened its first Café Coffee Day outlet in Bengaluru in 1996 and has established the largest footprint of café outlets in India as of December 31, 2014, (Source: Indian Coffee Industry Overview, March 2015, Technopak (“Technopak, March 2015”) with a network of 1,538 café outlets spread across 219 cities, including under the established and recognized brand name “Café Coffee Day” (popularly referred to as “CCD”), as of June 30, 2015 (Source: Company Data). In terms of the number of chained café outlets, it had a market share of approximately 46% in India, with its café footprint being nearly four times larger than the cumulative footprint of the next four competitors, as of December 31, 2014 (Source: Technopak, March 2015). The brand Café Coffee Day ranked second in the Most Trusted Brands in the food service retail category in India, and was one of the only four indigenous Indian brands to be recognized as the Most Exciting Indian Brand in India in 2014 (source: Economic Times, BE Survey, 2014).

 

The Company’s wholly-owned subsidiary, Tanglin Development Limited (“TDL”), is engaged in the development and management of technology parks and related infrastructure, offering bespoke infrastructure facilities for IT-ITES enterprises. As of June 30, 2015, TDL had two technology parks, namely Global Village situated in Bengaluru, Karnataka with a land parcel spread over an area of approximately 114 acres (of which approximately 91 acres has clear land titles; and Tech Bay situated in Mangaluru, Karnataka with a land parcel spread over an area of approximately 21 acres.

 

The Company’s subsidiary, Sical Logistics Limited (“SLL”), in which CDEL holds a 52.83% equity holding, is one of the leading integrated logistics solution providers in India with over five decades of experience. SLL is listed on the BSE and NSE and had a market capitalization of Rs. 8,009.42 million as of June 30, 2015 (source: www.nseindia.com).

 

The Company’s subsidiary, Way2Wealth Securities Private Limited (“W2W Securities”), in which CDEL holds a 85.53% equity holding, is a retail focused investment advisory company which provides wealth management, broking, portfolio management and investment advisory services. As of June 30, 2015, W2W Securities had branches (owned and franchised) spread across 21 states in India.

 

The Company owns and operates three luxury boutique resorts (one directly through the Company, and two through the wholly-owned subsidiary, Coffee Day Hotels & Resorts Private Limited, under the brand The Serai. Its resorts are located in the State of Karnataka at Chikkmagaluru, Bandipur and Kabini. In addition, it also holds a minority interest in and manages a luxury resort located in Andaman and Nicobar Islands.

 

The Company also has investments in certain IT-ITES and other technology companies such as Mindtree in which it owns a 16.75% equity holding (effective holding being 16.04%) as of June 30, 2015 and in which the Promoter, V.G. Siddhartha, additionally owns 3.01%. Other investee companies include Ittiam, Magnasoft and Global Edge.

 

Disclaimer

Coffee Day Enterprises Limited is proposing, subject to applicable statutory and regulatory requirements, receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed the Red Herring Prospectus with the Registrar of Companies. The Red Herring Prospectus is available on the websites of SEBI, BSE, NSE at www.sebi.gov.in, www.bseindia.com and www.nseindia.com, respectively, the GCBRLMs at www.investmentbank.kotak.com, http://www.online.citibank.co.in/rhtm/ citigroupglobalscreen1.htm and http://www.morganstanley.com/about-us/global-offices/india/, and the BRLMs at www.axiscapital.co.in, www.edelweissfin.com and www.yesbank.in. Any potential investors should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the Red Herring Prospectus, including the section titled “Risk Factors” on page 24 of the Red Herring Prospectus. Potential investors should not rely on the Draft Red Herring Prospectus filed with the Registrar of Companies, for making any investment decision.

 

This press release is only for information purposes. This is not a Prospectus announcement and does not constitute an invitation or offer to acquire, purchase or subscribed to securities. The statutory ads have been released on October 7, 2015, and investors can refer to the same. All capitalised terms used and not specifically defined here shall have the same meaning as ascribed to them in the Red Herring Prospectus.

 

This press release does not constitute an offer of securities for sale in the United States or elsewhere where such an offer would be unlawful, and the securities referred to in this press release may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Coffee Day Enterprises Limited does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.  Any public offering of securities to be made in the United States will be by means of a prospectus that may be obtained from Coffee Day Enterprises Limited and that will contain detailed information about Coffee Day Enterprises Limited and its management, as well as financial statements.

 

This press release should not be used to prepare an article for publication in the United States.

 

It may be unlawful to distribute this press release in certain jurisdictions. This press release is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada or Japan.  The information contained in this press release does not constitute an offer of securities for sale in Australia, Canada or Japan.

 
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