Strong market interest in the company behind India's biggest coffee chain is testament to the country's growing appetite for java, but what does that mean for India's ancient tea industry?
Earlier this month, Coffee Day Enterprises—the operator of homegrown chain Cafe Coffee Day (CCD)—raised $175 million in an initial public offering that was more than 1.8 times subscribed. With a pre-IPO valuation of around $1 billion, the company's institutional investors included the likes of BlackRock India and Merrill Lynch Capital.
Despite shares falling on the first day of trade, the hype was a reflection of CCD's hugely popular brand. With more than 1,000 cafes country-wide, it's now a household name in Asia's third largest economy.
While coffee has traditionally been dominant in India's south, where it is known as filter coffee, the drink gained nation-wide popularity in the early 2000s amid a cafe culture boom that some say mirrored the growth of India's tech sectors.
Aside from CCD, other popular coffee joints include domestic firm Barista and global giants Costa Coffee and Starbucks. The latter entered the Indian market in 2012 and has 75 stores to date.
The explosive growth of well-known chains is indicative of an increasingly wealthy Indian middle class that is looking to embrace Western trends. New Delhi hopes to top 8 percent economic growth next year and multinationals of all stripes are eyeing the opportunities offered by a newly monied group of consumers.