Tatas" PE arm looks for opportunities in F&B business

The private equity arm of Tata Group is looking to acquire marquee restaurant brands, upping India’s oldest industrial house’s play in the booming ‘eating-out’ business. Tata Opportunities Fund, along with Tata Sons, the group’s holding company, is currently prospecting three deals to tap the rising consumption in India stated a report by Reeba Zachariah in The Times of India.

“We are looking at opportunities in food and beverages. We are studying how the presence of restaurants can be scaled up and synergised with the group’s FB business,” said a person familiar with the conglomerate’s plans. He said, “The models should offer exit opportunities within the group as well as outside.” The association will also help the restaurants to take advantage of the group’s sprawling presence in real estate, hotels and retail.

According to the fund’s mandate, Tata Opportunities Fund largely invests in Tata group companies, but it can also invest up to 30 per cent of its corpus in non-Tata ventures. The fund had looked to bring Burger King into the country but eventually Everstone Capital, another PE fund, signed up with the US hamburger chain.

“Tatas are eyeing buyouts and are looking to cut deals in the north of USD 35 million,” said an investment banker, adding, “The challenge is that fewer assets of that scale are available for acquisitions.” The group looked at Kampala Hospitality that runs ‘The Village’ restaurants but opted out since the deal size was smaller.

It is currently looking at Mumbai-based Indigo restaurants, which is estimated to be valued at about Rs 200 crore. The USD 100-billion conglomerate has a presence in the restaurant business, albeit in a small way. It, along with US-based Starbucks, runs cafes in India. Besides, with Singapore Airport Terminal Services, it operates cake outlets under the Cake Bake brand.

Tatas" PE arm looks for opportunities in F&B business