India's Cafe Coffee Day chain launched the country's largest stock market flotation in three years on Wednesday, as it seeks to tap the tea-loving nation's growing taste for caffeine.
Coffee Day Enterprises, which owns the chain of cafes, hopes to raise $176 million through the initial public offering (IPO), which runs until Friday.
India's biggest coffee chain opened its first store in Bengaluru in 1996 and has grown to have 1,538 cafes spread across 219 cities and towns throughout India.
It commands the market share in Asia's third-largest economy but faces fierce competition from American coffee behemoth Starbucks and Indian chain Barista.
Cafe Coffee Day plans to use the money raised to pay off loans and open new stores to stay ahead of its rivals and consolidate its position in India's fast-growing coffee market.
"Cafe Coffee Day has redefined coffee in India and has established a strong brand value," retail analyst Alok Churiwala said.
"The stock looks expensively priced but I believe it captures the India growth story of rising aspirations, changing tastes of youth towards coffee and the impact of demographic dividend.
"So I do not think Cafe Coffee Day will run into any trouble raising the money they want," the head of Churiwala Securities in Mumbai added.
Cafe Coffee Day has priced its shares between Rs 316 ($4.9) and Rs 328 ($5) and is already well on its way to meeting its target.
On Tuesday, the company raised Rs 3.34 billion ($51 million) from key investors ahead of the formal opening of the IPO.
If it meets its valuation, the IPO will be the biggest in India since December 2012 when telecom infrastructure provider Bharti Infratel raised $638 million.
Cafe Coffee Day's share sale is being welcomed as marking a revival in India's long-suffering IPO market.
It comes two weeks before India's most successful budget carrier Indigo launches its own IPO in a bid to raise $400 million.
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