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.
The growth of cloud kitchens in India is being fuelled by the increasing demand for affordable, convenient, and quality food delivered to homes. Additionally, cloud kitchens benefit from lower operational costs since they do not require expensive retail locations or large front-of-house investments.
India's cloud kitchen market is on a remarkable trajectory - projected to hit approximately USD 2.84 billion by 2030, growing at a CAGR of 16.66%. This surge reflects how urbanization, evolving lifestyles, and the demand for convenient food delivery are rewriting the rules of dining.
Prominent companies have established prosperous multi-brand cloud kitchen empires, including Biryani by Kilo, Eat Sure, BOX8, Rebel Foods (Faasos, Behrouz Biryani), and Fresh Menu. In an effort to reach hyperlocal markets, a lot of restaurants are also introducing delivery-only sub-brands, marking 40-50% profits in the space.
The Ongoing Trends
Key trends shaping the cloud kitchen industry includes the adoption of multi-brand models within a single kitchen infrastructure to enhance operational efficiency. There is a notable rise in regional and comfort food delivery brands catering to diverse local tastes. Cloud kitchens are increasingly offering value-oriented options such as combo meals, meal boxes, and affordable single-serve meals.
“Businesses are also engaging in hyper local targeting to meet neighborhood-specific demand. To build stronger brand connections, they are leveraging influencer collaborations and social media engagement. Additionally, some cloud kitchen brands are beginning to explore physical formats like kiosks and food court outlets to provide an omni-channel experience,” added Aayush Madhusudan Agrawal, Founder & Director, Lenexis Foodworks.
Without décor or ambience to soften perception, hygiene becomes your frontline. Mohammed Bhol, Co-Founder and CEO at House of Biryan said, “I’ve found that daily protocols, rigorous training, and real-time audits aren’t just safety nets - they’re confidence builders. When people can’t see your kitchen, they need to feel your standards.”
He mentioned that he has learned the hard way, if it doesn’t arrive right, it doesn’t matter how good it tasted in the kitchen. “We’ve tested every layer: insulation, ventilation, seal integrity. Packaging isn’t a side gig, it's part of the recipe,” added Bhol.
Technology as the Backbone
Cloud kitchens function without a dine-in model, making technology vital at every operational level. From online ordering systems and kitchen display systems (KDS) to inventory and supply chain management, data analytics, smart POS integration, and automated marketing tools—each element plays a crucial role in ensuring seamless and efficient business operations.
Since cloud kitchens operate without a physical storefront, food aggregators serve as their primary digital marketplace. Platforms like Swiggy, Zomato, Zepto Café, Blinkit and Uber Eats offer immediate access to a wide customer base, making them essential for brand reach. They enhance brand discovery and visibility, while also handling delivery logistics—crucial for smooth operations.
Aggregators also provide performance dashboards with valuable insights into customer behavior, order patterns, and conversion rates, helping brands fine-tune their strategies. Additionally, aggregator-led promotional campaigns and paid placements can significantly boost order volumes and visibility.
The Challenges
Cloud kitchens face several challenges, including high customer acquisition costs driven by intense competition and platform commissions. This can be addressed by building direct digital connections with consumers through channels such as WhatsApp, loyalty programs, and emailers.
Another challenge is the dependence on delivery platforms for visibility which can be mitigated by investing in off-platform brand-building campaigns, digital content creation, and influencer partnerships. Agrawal added, “Maintaining consistent quality, hygiene, and delivery standards across various locations is also crucial and this requires strict adherence to standard operating procedures (SOPs) and regular kitchen audits. Lastly, in a cluttered market, it is essential to craft a sharp brand positioning and compelling product proposition to stand out.”
"Finding the right location was one of our key challenges," Aksha Kambhoj, Executive Chairperson of Aspect Hospitality explained by adding that they sought areas with high foot traffic to maximize visibility.
It’s a Profitable Biz
A well-run cloud kitchen isn’t just powered by good food - it runs on strong systems. Industry data shows that a lean, efficient model can hit EBITDA margins of 20–25%, with high-performing outlets pulling in ₹1.5–2 crore annually per location - depending on how well you read the market and build recall.
“High-performing brands have demonstrated the potential to scale even further, reaching ₹70–100 crore in ARR within three to four years, as seen in the case of Big Bowl,” added Agarwal.
While, the future will be focused on AI-powered kitchen operations, and tighter connectivity with fast commerce systems. Cloud kitchens are expected to become a major player in India's F&B industry with major focus on tier-2 and tier-3 cities.
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.
As restaurant brands plan for expansion, they usually adopt a blend of strategic, operational, and brand-focused approaches to drive sustainable growth. With the industry projected to directly employ nearly 10.3 million people by 2028, it's clear that the sector is experiencing rapid growth. In this competitive landscape, every restaurant or café aims to broaden its footprint across multiple locations. To achieve this, brands requires the implementation of specific key business strategies. They are:
Localisation is Important
Adapting existing dishes or creating region-specific items like authentic chinese cuisine are served very rarely in India, serving Indo-Chinese to suit the Indian palate.
“Innovation is all about hyper-local inspiration. We’re exploring jamun-based sours, curry-leaf-infused gin cocktails, and pickled elements in our drinks. We will soon be featuring summer special cocktail and mocktails featuring kokum, tamarind, raw mango, ripe mango and more—each with a little local inspiration behind it,” shared Hemender Reddy of The Moonshine Project.
Targeting Right Location = Right Audience
Location plays an important role in running the business profitably. Commenting on the same, Aksha Kambhoj, Aspect Hospitality said, “We have ambitious growth plans and are actively exploring opportunities in key urban centers and high-potential markets. Our expansion strategy is guided by a thorough understanding of consumer demand and market dynamics.”
After all, right location helps in maximizing the profits and serving more customers.
“Our expansion strategy for Mumbai in 2025 and 2026 involves establishing a significant presence across various high-footfall locations to ensure maximum accessibility for our customers, aiming for approximately one outlet every 3 to 4 kilometers like Highstreets, Malls, Airports, Metro Stations, and Corporate Parks etc,” added Kamboj.
Digital and Delivery-first Models
Consumer preferences are increasingly leaning toward convenience and digital ordering. To meet this demand, many brands are developing their own apps, collaborating with delivery platforms like Swiggy, Zomato, and Uber Eats, or launching cloud kitchens and dark kitchens to streamline operations and reach a wider audience.
Although, one thing is constant is that restaurants earn around 50% of the revenue through delivery platforms.
Ruchyeta Bhatia, Co-Founder, Poetry by Love & Cheesecake said, ‘The focus is more on technology and building systems to strengthen their product rather than following trends, as the brand aim for long-term stability. Our revenue is primarily driven by dining (70%), with deliveries accounting for 25-30% (aggregators, not their own).”
Skill-Building Opportunity for employees
Not all restaurants focus on growth of their employees. While some give opportunities to develop them so that employee satisfaction is given and there is a room for growth. This helps the employee to stay in the hectic-work environment for longer duration. 30-40% of the restaurant brands focus on skill-building and well-being of the employees.
Seijiro Hirohama, Managing Director, Kuuraku India Pvt Ltd said, ‘We have developed our own certification programs for Yakitori Chefs and Sake Sommeliers to ensure that our team is trained in both skill and spirit. These programs are carefully designed and closely monitored by our Japanese chefs, who pass on their knowledge, traditions, and techniques to maintain the highest standards of Japanese culinary excellence.”
While, Rahul Shetty, MD, Peninsula Hospitality stated, “If you are running a business, lot of departments has to be taken care of. We do have cross training options and also explain an employee of what all can be focused on specific career for motivation.”
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