The high-end, standalone Olive group is diluting part of its equity and rolling out premium restaurants. Unless you already knew it, the last thing you'd suspect AD Singh of being would be a restaurateur. But these days, besides tastings, Singh's new appetite is number crunching.
Fine-dining or mass-dining restaurants are now going the way of chains, and the promoter of the Olive brand of restaurants is no exception.
Indigo, Shalom, Salt Water Grill, they're all on a trajectory of growth, but it is Anjan Chatterji's Mainland China (current turnover Rs 100 crore, expected to double by March 2009) that seems to have prompted Singh to revisit his business plans.
Olive (currently in Bangalore, Mumbai and New Delhi, where it re-opened in November 2007 after the original location was sealed by the municipal corporation) has ambitious expansion plans for which it is hoping to raise Rs 16-17 crore from the market by diluting its stake by about 40 per cent.
To that end, Singh has already bought out one of the original shareholders, and hopes that either HNIs or restaurant and real estate companies will partner with him in phase two of his expansion plans.
Phase two of the Olive group focuses, says Singh, "on creating new high-end brands" in conjunction with the existing one. The reason he's not looking at funds though is that "in an inflated market, the minimum ticket size for funds is Rs 25 crore", and Singh prefers the conservative to the aggressive approach.
"Funds," he says, "are more interested in a model that has replicability and scalability," while his vision for the group is to create boutique brands. With Olive Beach having replaced the earlier Olive in New Delhi (which too should re-open), the capital will see at least two more high-end restaurants launching this summer.
The first, at MGF Metropolitan in Saket, will re-visit the fine-dining experience in malls as a 50-covers, mixed-experience, live-music and casual dance format "anchored in very good food", created for around Rs 4 crore by the group.
While the mall diner opens in three months, a month later the group will launch a 110-covers, all-day F&B destination with wine and events as the prime focus at the government-run Samrat Hotel, close to the Prime Minister's house.
Already, chefs are under training for these restaurants in Europe and Australia. Breakeven for both these is likely to be in two and a half years.
Somewhere around the same time, a "quaint" new 100-seater Olive could open in South Bombay, something that has been on the cards for a while, with real estate being the big problem in the city.
"By March 2009," says Singh, "we expect to have a turnover of Rs 50-55 crore" and profits after tax, currently at 10-11 per cent, could drop to 5 per cent taking the new investments into consideration.
Around that time, Singh hopes to introduce one more high-end dining product as part of the Olive portfolio. None of these new brands, however, will be sub-brands of Olive. By 2010, the group's turnover is expected to be Rs 60-65 crore.
Phase three of the group's development (which will begin its rollout in 2009) will then leverage these brands to grow them across these as well as other important cities in India "" Goa is already on the cards "" as also possibly West Asia.
But also lookout for tie-ups with mall developers and real estate residential developers "to leverage our vision, provide anchor diners, cafes, design inputs, F&B services et cetera", says Singh.
In an industry with a very high attrition rate, Singh has managed to hold on to much of his key staff over the years, and says that recognition of this has come by way of attracting "good talent" from within the industry.
"It gives us the ability to create the right environment to start hiring and training great chefs," he puffs at a cigar. If he succeeds "" and he already has to an extent "" the manager-restaurateur could well have the country eating out of his hand.
