Indian F&B industry attract investors

The fast growing food business has seen a surge in funds flowing to back this sector

The Indian food and beverage (F&B) industry is attracting a surge of interest from investors interested in backing companies with scalable businesses and a robust back end supply chain.

Riding on a growing propensity of eating out and growing disposable income, several businesses have either raised funds or are planning to do so. Investors are jostling with each other to fund these fast-growing enterprises. In mid-January this year, Jubilant Foodworks, the Indian franchisee of Dominos Pizza, was oversubscribed 31 times when it listed on the bourses, and is today quoting 501% higher than the issue price.

Others, including Devyani International, the franchisee for Pizza Hut, KFC and Costa Coffee, and OmPizza, the franchisee for Papa John's Pizza, raised funds from ICICI Venture and TVS Capital respectively, catalyzing a spike in investor interest in the`100,000 crore F&B market, which includes quick service restaurants or QSRs, fine dining restaurants, bars and pubs.

However, soaring rentals, questions over scalability of businesses and durability of backend operations could dampen their enthusiasm.  Despite all these concerns, entrepreneurs believe that there's massive untapped potential in the Indian market. Rustling up the right recipe for their businesses may hold the key to making a success of their enterprises.