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Sep, 21 2015

Travel Food Services raise Rs 230 crore for expansion

"The company is rapidly expanding its presence in the travel retail space and they are talking to a couple of private investment bankers to scout for PE investors to fund this expansion," said the person privy to the development.

Travel Food Services (TFS), a subsidiary of Mumbai-based K Hospitality Corp, is looking to raise $30-35 million (about Rs 197 crore - Rs 230 crore) through private equity (PE) firms to fund its expansion plans, said a person aware of the development.

TFS, which has presence in the travel retail space, operates restaurants, cafes, food courts and lounges. The company operates food and beverage outlets in Indian airports such as New Delhi, Mumbai, Chennai and Kolkata apart from the Muscat and Salalah International Airport overseas. Recently, the company won the contract to operate food and beverage outlets at Mangalore airport as well.

Last year, the company got into lounge management business and opened lounge operations at Terminal 2 of the Chhatrapati Shivaji International Airport in Mumbai.

"The company is rapidly expanding its presence in the travel retail space and they are talking to a couple of private investment bankers to scout for PE investors to fund this expansion," said the person privy to the development, who did not wish to be identified.

TFS manages partner and proprietary brands including Smoke House Bar & Cafe, KFC, Domino's. The Coffee Bean and Tea Leaf, Cafe Coffee Day and Haagen-Dazs are among the others across the country's airports. It also has partnerships with Gate Gourmet for in-flight catering and with Lagardere Travel Retail for duty free and news and books (through the Relay brand).

In an email response to ET's query on fund raising, Varun Kapur, director of TFS, said, "As part of our strategic growth and expansion process, TFS is in the process of exploring various opportunities to raise funds at an appropriate time in the future."

Early this year, the company also won the contract to develop food courts at Pune and Vishakhapatnam railway stations. With the central government's recent decision to modernize 400 railway stations in the country, TFS is betting big on this sector.

During an earlier interaction with ET, Kapur had said the company has lined up investments worth Rs 200 crore to expand its presence across airports and railways over the next 2-3 years. "We currently get 50% of our business from travel retail and the revenue from this segment has grown 50% year-on-year in the last three years," Kapur had told ET. TFS currently operates over 170 outlets at airports across the country and overseas, catering to over 90 million passengers.

K Hospitality Corp, the parent company of TFS, owns and manages brands like Copper Chimney, Irish House, Bombay Brasserie and Serafina apart from having a presence in banqueting and corporate food service business.

Travel industry experts say that the burgeoning Indian middle class indicates a strong growth potential for the food service brands in the travel retail sector.  

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