New Delhi: Chalking out an aggressive growth strategy, coffee chain Barista Coffee on Tuesday said it was looking to induct a strategic investor to fund expansion plans, while still retaining management control of the company.
The company, fully-owned by NRI businessman C Sivasankaran's Sterling Group, is looking at partial dilution of equity as it moves along the path of profitability.
"A thought emerging is to open out, instead of being a 100 per cent holding of Sterling, and explore partial dilution of equity to bring down our stake to 80 per cent," Barista Coffee Co. CEO Partha Dattagupta said.
He said the group, which had lined up major expansion plans for the coffee retail venture, was looking to get in a strategic investor to fund the growth.
"We are thinking of partial dilution (of equity). But we will always have management control," he emphasised.
However, Dattagupta added that the plans in this regard "are still at a premature stage". Asked whether the strategic investor would be roped in from the domestic market or would be an international player, he said: "It can be anybody."
On whether the company had carried out a valuation of its assets or whether it had appointed any consultant to help in the process, he said these things would be done at a later stage.
"No valuation has been done as the concept is currently at a thought option stage. The only thing we realise is the need to expand for which we will require funds that a strategic investor can bring," Dattagupta added.
The company has been aggressively expanding across India and plans to invest Rs 50 crore this fiscal to add around 100 new stores to take the overall number of outlets to around 250.
"We plan to expand to 20 new towns like Rajkot, Nasik, Mysore, Patna, Jamshedpur and Udaipur and will invest Rs 35 crore to add 100 stores. Apart from this, we will spend Rs five crore on renovation and Rs 10 crore for setting up central kitchens in Delhi and Mumbai," Dattagupta said.
The company, he said, had achieved its first task of being a profitable venture. "Our first job was to turnaround and make profits. This will happen this fiscal," he said.
"We expect to be cash positive in this quarter and hope to be PBT positive by the last quarter of this fiscal or the first quarter of next fiscal," Dattagupta said, though refusing to divulge further financial details.
Sivasankaran had hiked his stake to 100 per cent in December 2004 when the Sterling grpup acquired the Tatas stake to make it a fully-owned subsidiary.
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