Sebi Seeks Clarification on Coffee Day Enterprises' IPO

New Delhi: Markets regulator Sebi has sought clarification on the proposed Rs 1,150-crore initial public offer (IPO) of Coffee Day Enterprises, which runs the country's biggest coffee chain Cafe Coffee day.

Without disclosing details of clarifications sought, Sebi has said "clarifications (are) awaited from lead manager" for the proposed public issue.

As per the latest weekly update of processing status of draft offer documents filed with the Securities and Exchange Board of India (Sebi), regulator has said clarifications were awaited on the proposed IPO of Coffee Day Enterprises as on July 10, 2015.

The next update would be available on July 20. Sebi said that it might issue observations on Coffee Day Enterprises' IPO document within 30 days from the date of receipt of satisfactory reply from the lead merchant bankers to the clarification or additional information sought.

The regulator had received the draft offer documents on June 26, this year through its lead manager Axis Capital.

As per the Draft Red Herring Prospectus (DRHP) filed with Sebi for the public offer, the company intends to raise an estimated Rs 1,150 crore to aid its expansion plans and pay off debt.

Out of the capital raised, the parent company plans to utilise nearly Rs 632 crore to pay off debt and the remaining to open new stores, set up coffee bean roasting plants and make vending machines, the proposal said. In the next two financial years, the company plans to open over 215 outlets and set up 105 kiosks.

In addition to having the largest chain of cafes in India, the company also operates a vertically integrated coffee business which ranges from procuring, processing and roasting coffee beans to retailing coffee products across various formats.

The first CCD outlet had opened in Bengaluru in 1996. It now has a network of nearly 1,500 outlets and commands a market share of 46 per cent with a network nearly four times larger than the cumulative footprint of the next four rivals.