Coffee shop chain operator Cafe Coffee Day Enterprises is believed to have fixed the price band at Rs 316-328 for its initial share sale. (Souce: CCD Website)

Coffee shop chain operator Cafe Coffee Day Enterprises is believed to have fixed the price band at Rs 316-328 for its initial share sale.

The operator of Cafe Coffee Day shops has filed papers with Sebi for an IPO to raise an estimated Rs 1,150 crore which would be the largest share sale this year so far.

Sources said the price band for the IPO has been fixed at Rs 316-328 and the issue is expected to open on October 14.

This would also be the largest initial share sale by any company so far this year, they added.

The company, which runs the country’s biggest coffee chain under the brand Cafe Coffee Day (CCD), has got private equity giants like KKR, Stanchart PE and New Silk Route as its investors and has reserved Rs 15-crore worth shares for staff.

V G Siddhartha, who is the main promoter as well as Chairman and MD, holds 54.78 per cent stake, while all promoters together have 92.74 per cent holding in the company.

Among other major shareholders, KKR has 3.43 per cent and Nandan Nilekani, Infosys co-founder and former chief of UIDAI, has 1.77 per cent stake.

Shares would be offered to public investors through a Book Building Process wherein 50 per cent of the net issue would be allotted on a proportionate basis to Qualified Institutional Investors, while the company may allocate up to 60 per cent of the QIB Portion to Anchor Investors on a discretionary basis. One third the Anchor Investor portion would be reserved for domestic mutual funds.

Coffee Day Enterprises is the parent company of the Coffee Day Group and operates coffee business through a subsidiary, Coffee Day Global Ltd (earlier known as Amalgamated Bean Coffee Trading Company Limited) and its subsidiaries.

Coffee Day Global Ltd had a total income of Rs 1,154 crore and operating profit of Rs 189 crore in fiscal 2013-14.

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

Domestic equity markets opened flat on Wednesday tracking SGX Nifty and Asian markets. Sensex opened 0.13 per cent up at 26,966.86. (Photo: PTI)

9.19 am: The BSE Sensex was down 0.15 per cent at 26,893. The 50-share index was down 0.19 per cent at 8,137. Tata Steel, ICICI Bank and ACC were down over 1.30 per cent each in the morning trade.

Domestic equity markets opened flat on Wednesday tracking SGX Nifty and Asian markets. Sensex opened 0.13 per cent up at 26,966.86. Nifty opened 6.7 points down at 8,146.20.

In the 30-share index, ONGC and Vedanta were up 2.73 per cent and 1.23 per cent in the opening trade.

Asian stock markets were mostly higher Wednesday, taking in stride the IMF’s lower global growth forecast, while Japan traded cautiously as its central bank left monetary policy unchanged.

Back home, Sensex and Nifty gained 0.55 per cent and 0.41 per cent, respectively, on Tuesday.

Jayant Manglik, president, retail distribution, Religare Securities, said, “Sentiments were upbeat on Tuesday from the beginning in response strong global cues, which later gained strength from the statements made by the Finance Minister and the Prime Minister, sharing their view on growth rate and rollout of major reforms like GST as planned. It was mixed session on sectoral front with consumer durables and FMCG topping the chart while IT pack ended in red.”

Foreign portfolio investors have resumed purchasing Indian equities following reduction in the repo rate by the Reserve Bank of India (RBI) and an anticipated delay in the rate hike by the US Federal Reserve. These have helped benchmark indices recover 5% after hitting multi-month lows during the middle of September.

Overseas funds purchased shares worth $75 million on Tuesday, according to provisional data from the stock exchanges. This was the fourth consecutive session of buying, after persistent selling in the previous two-and-a-half months. FPIs offloaded equities worth nearly $1 billion during September and $2.58 billion in August, as fears of an economic slowdown in China led to selloff globally. Market participants said the larger-than-expected rate cut by the RBI will cheer the Street and rate-sensitive stocks in near-term provided it is fully transmitted by lenders to end users.

According to Bank of Merrill Lynch, a 50-bps rate cut, if fully transmitted to mortgage rates, would be equivalent to a 3-4% reduction in housing prices.

“Although we concur that rate cuts help rate-sensitive sectors’ sentiments, we believe mortgage rates impact the sector more. Few public sector banks have reduced mortgage rates by 25-40 bps. However, we await mortgage rate cut announcements from private sector banks that hold a lion’s share of India’s mortgage book,” said Abhishek Kiran Gupta, lead real estate analyst with Bank of America Merrill Lynch.

Private sector lender ICICI Bank on Tuesday cut the home loan rates by 25 bps to 9.65% for new customers. Existing customers would now have to pay an interest rate of 9.55%, compared with 9.9% earlier. I-bulls Housing Finance also cut home loan rates by 25 bps to 9.6% with immediate effect.

Experts said the weak US payroll data for September and the declining odds of a rate hike by the US Federal Reserve will also keep inflows intact in near term. “The odds of a US rate hike during October have lessened due to poor payroll data, and the consensus expects the rate hike by January 2016. In the immediate term, emerging markets will be on a positive note and India is likely to be a strong beneficiary,” said Vinod Nair, head of fundamental research at Geojit BNP Paribas.

According to Bloomberg data, all emerging Asian markets, barring Taiwan, have witnessed inflows from foreign investors so far in the week, with India surpassing its peers. South Korea comes next with inflows worth $116.3 million, followed by Indonesia, where foreign institutions bought equities worth $82.6 million.

KBC Asset Management of Belgium is exiting the Indian asset management business by selling its 49% stake in mutual fund joint venture Union KBC Asset Management Company to Union Bank of India.

Though the valuation was not disclosed by the AMC, market participants peg it around 1% of average assets under management (AAUM) of the fund house.

According to the data from the Association of Mutual Funds in India, total AAUM of Union KBC AMC was at Rs 2,672.23 crore during the July-September quarter.  “It’s not (a) very positive sign for the Indian mutual fund industry, as we have seen several exists of foreign players from India. With losses piling up for the fund house, I think it didn’t make good proposition for KBC to stay invested in India,” said a senior member of the fund house on condition of anonymity.

This is the second exit of foreign fund house from India in the current calendar year. Earlier, Pramerica AMC bought out assets of Deutsche AMC.  Other foreign players such as ING Investments, Morgan Stanley Mutual Fund, Fidelity mutual Fund and Daiwa Mutual Fund had also exited the Indian markets.

Union KBC has been managing assets of Union KBC Mutual Fund since 2011. It offers a wide range of products in India under different asset classes such as equity, fixed income and gold.

Johan Thijs, CEO of KBC Group, said: “This agreement fits in with KBC Asset Management’s strategic focus on KBC Group’s core markets and activities. I would like to thank our Indian clients, shareholders, staff and all other stakeholders for the trust they have placed in KBC.” For the financial year 2014-15, Union KBC AMC reported loss after tax of R21.16 crore.

Arun Tiwari, chairman & managing director of Union Bank, said the bank has always stated its firm belief in the potential of the Indian market for investment funds. This transaction reaffirms the bank’s vision to provide all financial solutions under one umbrella, which, apart from banking products and services, also include life insurance products through its joint venture Star Union Dai-ichi Life Insurance Co, and mutual fund products through Union KBC AMC. He reiterated the commitment of the bank towards offering portfolio of services to investors under its own brand.

The UK’s health regulator Medicines and Healthcare Products Regulatory Agency (MHRA) inspected Wockhardt’s L-1 Chikalthana drug manufacturing plant and “there were no critical observations, the company said in a statement on Monday.

Wockhardt shares were trading over 2 per cent up on Tuesday after the company said that UK’s health regulator Medicines and Healthcare Products Regulatory Agency (MHRA) has found “no critical observations” at its L-1 Chikalthana drug manufacturing plant.

The UK’s health regulator Medicines and Healthcare Products Regulatory Agency (MHRA) inspected Wockhardt’s L-1 Chikalthana drug manufacturing plant and “there were no critical observations, the company said in a statement on Monday.

At 11.12 am, Wockhardt shares were yup 2.89 per cent up at Rs 1585.65. Sensex was up 84.43 points at 26,869.98 during the same time.

The MHRA withdrew the Chikalthana plant’s quality certificate two years ago, citing quality control lapses.

Imports from the plant have been banned by the US Food and Drug Administration since November 2013.

With Reuters inputs