Pre-pandemic was a big time for restaurant IPOs. While many companies like Barbeque Nation and Speciality Restaurants went public and several more were reportedly planning to do so. 2022 has been a different story. Restaurant IPO activity has gone silent amid a turbulent stock market. But there are other underlying trends that should help create a more favourable environment for IPOs once things settle down.
The one thing that IPOs need is a stable environment. And global financial markets have not been very stable lately. Inflation, rising interest rates and geopolitical tensions resulted in a fairly broad market reset in the fourth quarter of 2021 with markets down 10 percent to 15 percent overall.
Wild market swings make it difficult for companies to set an IPO price, which is determined relative to other stocks’ prices. Restaurant companies planning to go public are likely waiting out the choppiness before diving in.
The lower demand pushed down the prices these restaurant companies could fetch in an IPO, making it less desirable for companies to raise funds this way. In addition, overall weakness in the restaurant industry pushed down stock prices, which also made an offering less desirable. Investment bankers have long argued that any company if it’s good enough, can go public at any time.
But if these good companies can attract higher valuations by selling to private-equity firms or other private investors, then they almost certainly will go that route. What’s the point of going through the cost and hassles of an IPO if you’re not getting a premium valuation?
“I think that restaurants usually don't switch to IPOs because of a limited turnover. It's still feasible for a very big chain of restaurants. But looking at the current scenario there have been a lot of difficulties faced by the restaurant industry. Having IPOs, in that case, might incur risky bait for the restaurateurs and employees as well. In fact, many international chains of restaurants have faced a huge risk post covid due to IPO allocation which makes us think twice before switching to IPOs,” Debaditya Chaudhury, managing director of Chowman, Oudh 1590 & Chapter 2 commented.
Indeed, some companies long thought of as IPO candidates have instead taken private-equity investors. What’s more, companies with weak sales are less likely to go public. So, the two year weakness has likely filtered out some of the companies that might have gone public.
One of the biggest IPO failures of the food service industry was Zomato in 2021. It is clear that the startup is incurring significant losses. Zomato’s ambitious expansion plans have caused a serious dent in its financial performance (and will continue to do so). It has to pump crores into advertising and promotional activities to drive customer growth. They incur huge customer acquisition costs by offering frequent discounts and referral bonuses. On 15th February 2022, for the first time since its market debut, Zomato shares dropped below their issue price.
Investor wealth has plummeted with the recent sell-off in new age tech stocks. The reasons for the decline are earnings disappointments, high valuations, and growing fears of aggressive monetary tightening to curb soaring inflation.
While IPOs are a great way to fundraise and generate publicity and credibility in the market, they come with heavy expectations. According to Supreet Raju, co-founder, OneRare, an IPO carries an excellent financial burden for the business, and in an industry as dynamic as food, this can quickly become problematic.
“Food businesses operate on thin margins and results for each quarter can vary on food inflation and market dynamics. For restaurant founders, an IPO can bring great external pressure to their business, which can be unsavoury. Restaurants require quick decisions, and creative overhauls and IPOs can sometimes lead to a loss of control. Any restaurant wanting an IPO would have to be sure-footed before opening its business up for public scrutiny,” Raju further explained.
To understand how dramatically the companies’ fortunes changed, one has to go back to that era, in which investors were bidding ridiculous prices for growth chains. The enthusiasm for these companies was such that many large private-equity firms were investing in upstart concepts in a bid to find their own gold mine. Some entrepreneurs with no industry experience were jumping into the business, sensing an opportunity to latch onto the fast-casual boom.
Back in 2012, The Specialty Restaurants Ltd. initial public offering was a landmark event for more than one reason. It was the first Indian restaurant company to go public. (Jubilant Foodworks, another listed entity, is a franchisee for Domino’s Pizza and Dunkin’ Donuts.) Secondly, the relatively modest 34 million US dollars IPO, oversubscribed 2.5 times, gave private equity investors a rare exit. The other reason the Specialty listing is important is that it has made the restaurant sector India’s new private equity darling, threatening to replace IT ITES (information technology information technology enabled services). But the situation looks bleak after 10 years.
Now the problem with such offerings is that the younger a restaurant chain is, the riskier the investment. Growth chains run into problems, especially as they test new markets and expand beyond core areas. Many companies simply don’t do well as larger chains, but there is intense pressure on small chains to add units, even to their own detriment.
What’s the result of all this? Well, chains that might have gone public were instead sold to other private-equity firms, just like what happened before the IPO boom. Institutional investors simply have no appetite for the risk that small companies present. While they would welcome a strong chain to the public markets.
With interest rates low, investors are gobbling up equities. Private equity firms, which tend to buy up restaurants in bundles, are looking to cash out by taking the companies public. While the demand for restaurants is hot right now, analysts say this is cyclical. It’s almost like rushing for the gates because all it takes is one that goes particularly sideways and then it could close right back up.
Restaurant pop-ups are rapidly gaining momentum in India, not just as a culinary trend but as a strategic business and marketing tool. From experimental kitchens and chef collaborations to best bar takeovers and themed dining concepts, pop-ups are allowing restaurants and hospitality brands to stay agile, relevant, and culturally engaged.
This format offers a unique opportunity to test new ideas, like menus, concepts, or even partnerships without the long-term investment of a full-scale outlet. The trend is fuelled by social media buzz, influencer collaborations, and community platforms. With exclusivity, visual appeal, and time-bound availability, these events tap into FOMO while leveraging digital storytelling to generate viral traction and broader brand visibility. Around 80% of the restaurants in India are doing pop-ups to attract more customers.
What’s pushing the Growth?
Pop-up restaurants bring a fresh experience to a new market for a short span of time. In this type of formats, guests sample the cuisines, setting, service, etc. Pop-up restaurants are also a new way for restaurateurs to test out a product on a new market with a very low investment.
Pop-ups offer immense strategic value to restaurateurs. Ranbir Nagpal, CEO of Yazu Hospitality Pvt. Limited shared, “At KICO, we've seen how a well-executed popup can drive buzz, test new markets, and expand our brand footprint. They allow us to experiment with limited-time menus or collaborative formats without long-term overheads.”
More than just revenue generators, they’re excellent tools for community building and storytelling — particularly when done around cultural moments or niche interests like sneakers and cocktails, which are integral to our brand.
Saket Agarwal, Co-Founder, Manifest Hospitality said, “At Latoyá, we see them as cultural and culinary exchanges, an opportunity to showcase fresh ideas, collaborate with like-minded talent, and bring in footfall that extends beyond regular diners. From a brand perspective, pop-ups help build relevance and community, especially when there’s a strong concept, storytelling, and synergy behind the collaboration.
The Right Clientele
The target audience is typically urban millennials and Gen Z diners, those who are experimental, digitally active, and place a premium on novelty and curated experiences.
Angadh Singh, Co-Founder of Call Me Ten said, “While some events are priced at a premium due to their exclusivity or the involvement of celebrity chefs, others are more accessible to attract volume and footfall. The strategy often depends on the intent, brand building or revenue generation.”
Overcoming Challenges
Challenges typically lie in operational compatibility, from aligning kitchen setups to managing workflows with guest chefs or bar teams. The key is tight pre-planning: understanding their prep and service needs, doing dry runs, and keeping communication crystal clear.
Highlighting his views, Nagpal added, “We’ve learned that keeping the menu tight, using portable equipment, and pre-planning tech and design elements is key. Clear communication, a strong visual identity, and local influencer engagement go a long way in creating impact fast.
“Technology, especially tools that streamline ordering, inventory, and kitchen coordination can really help minimize chaos and maximize output,” pointed Agarwal.
The Business Scenario
A well-executed pop-up with the right audience fit can lead to a significant boost in sales during the event window and a strong halo effect afterward. More importantly, it adds to brand value and recall, which is harder to measure but incredibly important in the long run.
“In terms of business value, popups can lead to 20–30% increase in revenue during activation windows and offer huge intangible value — new customer acquisition, social media traction, and potential partnerships,” highlighted Nagpal.
While Singh added that the long-term value often lies in audience engagement, brand recall, and creating a deeper emotional connect with diners.
The future is quite certain that the trend will increase as pop-ups are no longer a novelty, they are becoming a powerful tool in a restaurant's culinary and cultural playbook.
In-house bakeries are becoming a defining feature of modern cafés, driven by growing consumer demand for freshness, craft, and ingredient transparency. On-site baking enables brands to craft unique offerings, enhance sensory appeal, and ensure stricter quality control. Though, it demands skilled talent and higher operational investment, the model offers lasting brand distinction, improved profit margins, and a more meaningful guest experience.
The Indian bakery market is expected to grow at a CAGR of 9.12% from 2025 to 2033, reaching a projected value of USD 31.5 billion by 2033. Around 45-50% of the cafes are focusing on in-house bakeries to increase their profits.
Ongoing trends in this sector
There is a shift towards more mindful baking—where indulgence meets intention. Trends include a rise in gluten-free, eggless, and refined sugar–free options, along with small-batch viennoiserie, nostalgic desserts with a twist, and seasonal menus that reflect local produce.
Rahul Bajaj, Founder of The Blue Gourmet said, “Sustainability is also playing a larger role as cafés are choosing clean-label ingredients, reducing food waste and packaging consciously.”
Pairing coffees with baked goods
Coffee and pastry are being curated more intentionally than ever before. Eesha Sukhi, Director, The Bluebop Café said, “Curated pairing menus for e.g., espresso with chocolate tarts, pour-overs with almond croissants are on rise as brands can promote combo deals to drive trial and boost average spend.”
Adding to this, M. Balaji, Co-Founder & CEO, Dolci, Bengaluru said, “You’ll find options like bagels, flaky croissants, spiced tea cakes, and even Indian-inspired bakes—think masala breads or cardamom-infused pastries—that are designed to complement specific brews or blends.”
Cafés are doing pairings to enhance both flavour and guest experience. This level of thoughtfulness encourages exploration, increases average spend, and elevates the café from a transactional pit stop to a destination.
Overcoming Challenges
Running an in-house bakery comes with operational hurdles—early prep cycles, space limitations, skilled manpower, and maintaining consistency. Bajaj highlighted, “The key is to build a focused menu, invest in versatile baking equipment, and cross-train staff to ensure flexibility.”
Baked goods also have a shorter shelf life, so managing wastage becomes crucial. “There’s food safety and hygiene—something that’s under increasing scrutiny. If you don’t get that right, it can lead to serious consequences, including license cancellations,” added Balaji. Ingredient sourcing is another hurdle, especially with fluctuating prices and supply inconsistencies.
The Business Perspective
Exact numbers vary from brand to brand, but in-house bakeries definitely help increase average spend per customer. While Sukhi pointed that in-house bakery sales can contribute 20%–30% of total revenue, depending on the café’s focus.
“India’s bakery market is already valued in billions, and it’s growing steadily—around 9% year-on-year. So, for cafés, having a bakery section isn’t just nice to have—it’s becoming essential to stay competitive,” added Balaji.
Signature bakes often drive impulse buys, have higher margins than beverages, and perform well across both dine-in and delivery formats. “In-house bakery sales can contribute anywhere between 25% to 45% of the total café revenue, depending on how integrated and visible the offering is,” added Bajaj.
Hence, we can surely say that cafés with in-house bakeries are redefining the new age café experience. It’s no longer just about a good cup of coffee—it’s about the story, the aroma of fresh bakes, the quality, and the comfort that comes with it.
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