Indian coffee chain Blue Tokai is aiming for a nearly three-fold jump in annual revenue by 2027 before it decides whether to go public, its top boss told Reuters on Monday.
Coffee culture is growing briskly in India, with the affluent in bigger cities increasingly working and holding meetings in cafes.
To cash in on India's fast-growing $300 million speciality tea and coffee cafe market, Blue Tokai plans to operate about 350 cafes within the next three years in cities including Hyderabad and Chennai, its CEO and co-founder Matt Chitharanjan said. The firm, backed by Belgian investment firm Verlinvest, currently has over 130 cafes.
The company is targetting a yearly revenue of 10 billion rupees ($118.5 million) by 2027, Chitharanjan said. Its revenue run rate, or annual projected revenue, is 3.7 billion rupees this year.
Ensuring "healthy" profit margins will make the firm "an attractive IPO candidate," he said without elaborating.
While many consumer-facing businesses, such as food and grocery delivery firm Swiggy and baby products retailer FirstCry have gone public this year, riding a stock market boom, an IPO is currently not on Chitharanjan's mind.
"Market conditions will fluctuate and we are more concerned about reaching our internal goals," he said, adding that "well-capitalized" Blue Tokai has "patient investors" who are not pushing for an early IPO.
India's stock market has cooled from record highs this year, with the benchmarks logging their worst monthly performance in October since March 2020.
Blue Tokai has raised $81 million since its inception in 2013 and competes with Western brands including Starbucks, Costa Coffee, and domestic rival Third Wave.
Tata Starbucks, a joint venture between Starbucks and India's Tata Group, which has over 400 cafes, posted a revenue of 12.18 billion rupees last year, while Costa Coffee, with more than 179 cafes, recorded 1.52 billion rupees in revenue in fiscal 2024.
Costa Coffee, Starbucks, and McDonald's McCafe have announced more expansion plans in India. But Blue Tokai is not concerned.
"We're not at a stage of the market where there's a lot of competitive pressure," Chitharanjan said. "It's more about growing the overall market pie, rather than stealing share from each other."
