| Partha Duttagupta, CEO of Barista Coffee Company, in Calcutta on Saturday. Picture by Kishor Roy Chowdhury
Calcutta, Sept. 16: Coffee retail chain Barista is hoping to complete a private placement by the end of this year.
The Sivasankaran-owned company is looking at a 15-20 per cent equity placement to finance its rapid expansion plan. It has appointed Standard Chartered as the merchant banker.
The company was orignally floated by Amit Judge of Turner Morrison and the Tatas also had a stake in it.
Barista will offer fresh equity to a new investor and the money will flow into the company and not to the promoter.
“We are looking at 100-120 new outlets every year for the next three years. That, coupled with renovation of old outlets, will call for a large investment,” Partha Duttagupta, chief executive officer of Barista Coffee Company, said.
The company plans to invest around Rs 150-200 crore in the next three years. The stake sale will be a means of finance. Moreover, the new partner will also shoulder future expansion cost.
“We are now putting out the information memorandum for prospective investors. Then a valuation will be carried out,” he added.
Sivasankaran's Sterling Group is said to have spent Rs 65 crore to pick up a 100 per cent stake in Barista.
Barista, one of the leading organised coffee retailer along with Café Coffee Day, grew 22 per cent in the last fiscal. It is hoping to be EBIDTA positive by December this year and cash positive in the last quarter of 2006-7.
“The target is to earn net profit in fiscal 2006-07,” Duttagupta noted. The company started operations five years back. Barista’s private placement is taking place at a time when famed international coffee chains like Starbucks is planning to enter India.
The CEO claimed the strategic investor could be anyone, from a domestic financial institution to a foreign private equity player to a player in this field.
“The management will remain with Sterling Infotech which is committed to the company,” he said.
The existing promoter has committed Rs 50 crore for expansion this fiscal with some 100 stores to be opened.
Out of that at least 20 will be large format stores Barista Crème, one of which was opened in Calcutta today.