Tamil Nadu's home-grown brand 'Dindigul Thalapakatti Hotels' has raised a whopping Rs 260 crore from CX partners, a private equity firm. With this, the legendary biriyani outlet seeks to become the 'McDonalds of the Indian food industry' as it sets eyes on expansion in the country and abroad.
The plan to scale up its presence nationally has been three years in the making and talks with investors began merely nine months ago. With 59 restaurants in India and 6 overseas (Malaysia, Singapore, Dubai, Sri Lanka, Paris in France and California in the US), the brand believed it was the right time to expand. With this investment, it seeks to penetrate deeper in Tamil Nadu and other locations in the south. While Kerala, Karnataka and Andhra Pradesh will be the first focus, metro cities in the north will be next.
"There is a huge amount of goodwill that the brand has, that should go beyond just Tamil Nadu. The promoter had to see what will help the company go to the next level. There is a huge growth possible for the brand and the promoter's vision is to see Thalappakatti become the McDonalds of South Indian cuisine," says a source close to the company. "And when I say McDonalds, I mean they institutionalised their processes so well that every McDonalds has the same taste. Similarly, we want to expand so that all South Indian diaspora can get the same biriyani, taste and quality everywhere," he adds.
He points that the journey to present a product worth investing in has been three years long.
"We had to work on how to get there - in terms of gaining private equity, professionalising management and getting new technology in place. All this was a three-year process and then we were ready to go into the market," he explains. "Investors look for a certain amount of readiness. If you see home grown brands, they are mostly promoter driven and family run businesses. There are lot of difficulties for such businesses to get investments. So, we worked around this and made ourselves an investable company," he adds.
The brand is confident that irrespective of the number of branches, the quality will not be compromised.
"We have a proprietary recipe, and masalas are still ground in Dindugal. The recipe is the heart and core of this restaurant. The rest of the work has become very institutionalised," he says. "So, you don’t need a specialised chef to make. So, it will be easy to scale up. Irrespective of where you have it, it will taste the same. We are ready to grow further," he adds.
However a challenge the brand is bound to face is the saturated biriyani market in states such as Andhra and Telangana. But they are not frazzled by this.
"Thalappakatti is a legendary brand and has its own distinct taste. There are over 10 types of biriyani in India. If people want the Dindigul type biriyani which uses seeraga samba rice, then Thalapakatti should be the go-to brand. Biriyanis will coexist much like India does," he says.
The advisor and ibanker to the transaction was M Vinod Kumar of Advay capital, Dindigul Thalapakatti has roots tracking back to 1957 and Sathish D Nagasamy is its Managing Director. It gained its name from its founder Nagasamy Naidu who wore a thalapa (turban) on his head. When he ran the restaurant, it was named Anandha Vilas Biriyani. But soon the biriyani outlet became synonymous with the turbaned man and adopted this brand identity in its name. Thalapakatti serves close to 4000 kg of biriyani from its outlets every day.