Subway India plans $150M IPO
What's the story
Subway India, backed by private equity firm Everstone, is gearing up for an initial public offering (IPO). The company hopes to raise between $100 million and $150 million through this move. According to Mint, Subway has pitched its plans to bankers in recent weeks and formal appointments are expected soon.
Investor strategy
Strategic move for Everstone amid market growth
The upcoming IPO is not just about raising capital. It is also a strategic move for Everstone, the company's early investor. The public listing would mainly enable a partial exit for Everstone, although the exact details are still being discussed. This comes as India's $80-billion food services market continues to grow at a projected 10-11% CAGR through 2030, driven by organized chains and online delivery services.
Ownership details
Evolving plans from private fundraising to public listing
Everstone holds a majority stake in Subway India, which also counts Norwest Venture Partners and Playbook Partners among its investors. Previously, Everstone had considered a partial stake sale in the fast-food chain's local operations as part of a $100 million private fundraising round. However, those plans have now evolved into the current public market listing strategy.
Franchise management
Master franchise rights for India, Sri Lanka, and Bangladesh
Everstone manages Subway restaurants in India through Eversub India. The company has the master franchise rights to open and run Subway outlets in India, Sri Lanka, and Bangladesh. A master franchise is an agreement between a franchisor (the owner of the brand) and a company to develop and manage its business in a specific country or region.
Growth trajectory
Subway's journey in India since 2000
Subway entered India in 2000 with its first store in Delhi's Saket. The company was initially franchise-owned until Everstone acquired the master franchise in 2021. At that time, Subway India had nearly 700 locations and planned to more than triple this number over a decade. Everstone invested an undisclosed amount in the food chain nearly five years ago to facilitate its expansion across India and South Asia.
Market knowledge
Everstone's extensive experience in the QSR space and beyond
Everstone has extensive experience in scaling consumer and food brands across India and South Asia. In the QSR space, it has been a master franchisee for Burger King in India and Indonesia, as well as Domino's Indonesia. The firm was also an early investor in Sula Vineyards and exited long before its IPO in 2022. Earlier this year, it divested its entire 11.26% stake in Restaurant Brands Asia (RBA) to Inspira Global for ₹460 crore.