Adyar Ananda Bhavan sells majority stake to Bodhi Tree for $180 million

Chennai-based Adyar Ananda Bhavan (A2B) has sold a majority stake to Bodhi Tree Systems for $180 million, as the 50-year-old food chain looks to expand in India and overseas. The investment will also help the company modernise operations and prepare for a possible public listing.

Bodhi Tree Systems is backed by James Murdoch's Lupa Systems and co-founded by Murdoch and former media executive Uday Shankar. Shankar will take over as chairman of A2B's board, marking a shift towards a professionally managed structure for the family-run business.

The deal values A2B at around $350 million, according to an industry source cited by The Hindu. The investment is worth more than Rs 1,600 crore. VedaCorp, also referred to as Veda Corporate Advisers, advised on the transaction.

A2B co-founder KT Srinivasa Raja said the business had grown from a sweet shop started by him and his brother 50 years ago into a brand serving millions of families. He said the partnership with Bodhi Tree would help prepare the company for public markets, allowing customers, employees and investors to share in its future.

The funds will be used to enter new markets in India and abroad. A2B is looking at opportunities in western India and Europe, while also planning to expand its retail business. Vishnu Shankar of the promoter family told The Hindu that the company would modernise its factories in Chennai and Bengaluru and was considering setting up another facility to serve retail and export markets.

Founded in Chennai in the late 1970s, A2B began with a single shop in Washermanpet. Its second outlet in Adyar became central to the brand's identity. The chain later expanded across Tamil Nadu and Karnataka, including through outlets along national highways that became popular stops for travellers.

A2B now operates around 160 outlets in India and more than 30 overseas, with a workforce of over 15,000. Its international markets include Singapore, the United States, Australia, Malaysia and the United Kingdom. Alongside its restaurants serving South Indian vegetarian food, the company sells sweets and savouries through its retail stores and online channels.

Murdoch and Shankar said A2B had built strong consumer trust and that its overseas operations offered an opportunity to take the brand to a wider global audience. They also thanked co-founders K T Srinivasa Raja and K T Venkatesan for partnering with them to build a professionally managed food business.

A2B is Bodhi Tree's third investment, following its investments in ALLEN Career Institute and JioStar.

The transaction has also drawn attention to the potential for regional food brands to attract private equity investment and enter public markets. Balachandar R, director of Junior Kuppanna, said brands such as A2B and Haldiram's had only begun to tap that potential. He predicted that at least 100 food and beverage brands would be listed over the next decade. Balachandar had advised on the 2019 investment in Dindigul Thalappakatti, which raised Rs 260 crore from private equity firm CX Partners.