ICICI Venture to pick up 10%stake Devyani International

ICICI Venture is preparing to buy 10% stake in Devyani International Ltd. Devyani International is Ravi Jaipuria promoted firm that is known for its wide spread food chain and restaurants.

India"s leading private equity fund that manages assets of over $2 billion in the country, has decided to invest Rs 135 crore in the company that run is currently 180 fast-food restaurant across the country.

The most familiar names such as KFC, Pizza Hut, Pizza Hut Delivery (PHD), Costa Coffee and Sewsens, some self owned brand such as the South Indian restaurant Vaango are the tags that are listed under the company.

Confirming the deal, the founder of RJ Corp who is worth Rs 3,000 crore, said that the deal was signed on Wednesday.

The deal aims to promote and expand the food chain further India as well as globally. He further added that Devyani is planning to go public before 2013. Though an ICICI official was not available to tell the intricacies of the deal, a source close to the deal suggested that RS 225-250crore would be paid by the private equity firm in order to buy 10%stake in the in the company.

The deal, over all turns out to be a win-win situation as the deal would RJ Corp money to invest in their food chain and ICICI Venture gets to become a part of the one of the fastest growing business. However, it is for the first time that any private equity has invested in a company owned by RJ Corp.

According to the sources, ICICI Venture planned the stake noticing the increasing the urbanization and the change in patterns of the social and family lifestyle. In the current scenario, the rise in income and the change in lifestyle have caused the restaurant business to boom at a large scale. The food habits of the population are largely dominated by the youth.

Therefore, as commented by consulting firm Wazir Advisors founder and MD Harminder Sahni, that deal is happening at the right time on behalf of the both the parties, as with restaurant chains like Domino's and Mainland China doing well in the market, the overall industry is also growing rapidly.

Constantly growing at an annual rate of 40%, the food retailing and quick service restaurant industry sector is estimated at about Rs 5,000 crore. Devyani International Ltd is one of the companies that are promoted by Ravi Jaipuria. With more than 200 food and beverages outlets across the country, Devyani International is a big name itself.

RJ Corp on the other hand, besides being the largest bottlers for PepsiCo in the country and in some locations abroad, not only holds a majority stake in a beer joint venture with Anheuser-Busch InBev, also owns ice-creams brand Cream Bell, franchising rights for Walt Disney group company Disney Artist. The company further shows its interest in the field of real estate, education and hotels.

However, it was in 2008, entire of its food, retail and franchise operation was consolidated under Devyani International by RJ Corp. Varun Beverages, a subsidiary of RJ Corp, was handed over the beverages business.

Read more about: icici ventures, investment
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