India Equity Partners (IEP) is a private equity firm that currently invested $35 million in the restaurant chain ‘Sagar Ratna’, which serves South Indian Cuisine across the Nation Capital Region. Based in New York and Mumbai, the IEP’s investment they acquired 25 percent stake in the chain. With that being said, the majority stake will continue to be held by Jayaram Bana who started the chain with one branch in South Delhi’s Defense Colony. According to a source familiar with the development, the transaction was officially closed at the end of June after the deal was signed on June 22 and the funds were transferred on June 24. Unfortunately for the India Equity Group, the deal was initially structured as a majority stake sale, but after a long while of negotiations Sagar Ratna’s chairman and founder ultimately chose to continue to hold 75 per cent stake post-investment.
Investing through a $350 million fund, India Equity Partners, has been diligently scouting investment opportunities in the rapidly expanding theme of food and retail in India, including buyouts. Namely scalable franchisee plays, interest in the restaurant business has dramatically increased and investors are jumping at the chance to back popular food chains. With that being said, since 2010 the private equity firm, among others, have very suddenly become extremely active in India.
The Sagar Ratna deal was one that really made heads turn because the people of India could easily identify with the product at hand. However, the question or concern that arrises out of all this is wether all these private equity firms will keep investing in the growth of India once the Western economy recovers?