GEM India wants a second bite of Bakers Circle

GEM India Advisors (GIA), part of the New York-based Global Emerging Markets, a private equity fund, is understood to be interested in investing for the second time around in the Gurgaon-based Bakers Circle, a manufacturer of frozen bakery and confectionery products.

Bakers Circle is planning to raise around Rs 25 crore by the end of this summer after it raised around Rs 10 crore from GEM India during late-2006. Cargill Ventures is understood to have been a co-investor in Bakers Circle through GEM India.

GIA is an India-focused private equity fund manager and is part of the Global Emerging Markets (GEM) Group. GIA manages the GEM India Fund, a $100-million (around Rs 400 crore) fund focusing on industries benefiting from the growth in the domestic consumer demand and is looking to make investments in the healthcare, leisure, FMCG, entertainment, media, retail and education sectors.

Global Emerging Markets was founded in 1993 and has advised on $1.9 billion of transactions. GEM has offices in London and Paris. GEM has completed 155 private placements of publicly-listed firms in 20 different countries and six leveraged buyouts.

Dev Lall, CEO, Bakers Circle confirmed that they were raising around Rs 25 crore and were in discussions with various investors including GEM India. "In addition to raising capital, we are looking for investments from a strategic partner to fuel our growth plans," Lall added.

Bakers Circle is diversifying into the retail shelves with its frozen bakery products and is looking forward to an investment from a retail chain, which will give it the required platform.

At present, Bakers Circle is active in the business-to-business (B2B) mode supplying a range of gourmet breads, cakes, pies besides a range of pastries to fast food chains like KFC (Kentucky Fried Chicken), Pizza Hut, Subway and Mark Pi, a Chinese fast food chain besides at least around 100 outlets across the country. Bakers Circle is expected to post a topline of around Rs 20 crore next year.

The concept of specialised gourmet bakery products lately has been attracting strategic and private equity players with Britannia acquiring a 50 per cent stake in Bangalore Daily Bread chain of outlets. Peepul Capital has also made an investment in Chennai-based Oriental Cuisine which runs the Hot Breads chain.

GEM India in addition to its earlier investment in Bakers Circle has investments in Sula Vineyards and Moods Hospitality, which runs the fast food chain Yo! China and Trac Services, which run the Mark Pi chain.

According Venture Intelligence, a venture capital research firm, close to $100 million has been mopped by the boutique food and beverage firm during this fiscal.