Bengaluru, Oct 12 (IANS): India's leading coffee outlet player Coffee Day Enterprises on Monday announced Rs.1,150 crore initial public offering (IPO), aimed at reducing debt and dexpanding outlet footprint.

The company will initiate the IPO sale on Wednesday.

"We plan to increase Cafe Coffee Day outlet footprint by 135 outlets a year across India in the coming two years with the help of the funds we raise," said V.G. Siddhartha, chairman, Coffee Day Enterprises.

The company is offering equity shares of the face value of Rs.10 Equity Shares each for cash including a share premium aggregating up to Rs.1,150 crore.

While the issue comprises a net issue to the public (the Net Issue), a reservation of Equity Shares aggregating up to Rs.15 crore for subscription by eligible employees has been also provided.

Siddhartha said each new outlet would require an investment of Rs.37 lakh to Rs.40 lakh.

One special area, where Coffee Day Enterprises is concentrating, is setting up new outlets on the highways.

"Finding a decent washroom while travelling is a big problem for many of us, we plan to set up nearly 1,000 Coffee Day outlets on the highway which offer coffee, small bites, Internet and washrooms," said Siddhartha.

"With an outlet network of 1,538 spread across 219 cities in India, we have an outlet market share of approximately 46 percent in India which is nearly four times larger than the cumulative footprint of the next four competitors," added Siddhartha.

The Indian cities, with the highest number of Cafe Coffee Day outlets are Delhi (211), Mumbai (204) and Bengaluru (200) followed by other cities.

Cafe Coffee Day's competition includes Barista, Costa Coffee and Starbucks, among others.

Highlighting the company's backward and forward integration, Siddhartha said: "We are also the only Indian company with a highly optimised and vertically integrated coffee business which ranges from procuring, processing and roasting of coffee beans to retailing of coffee products across various formats."

Delving on the important coffee vending machine rental business, A. Venu Madhav, CEO, Cafe Coffee Day, said: "We currently rent about 30,900 coffee vending machines to corporates and other clients. We own a market share of 95 percent in vending machines. We plan to rent 5,000 new machines a year in the next five years."

Madhav said the average revenue per day per Coffee Day outlet is Rs.13,700.

The company employs 50 people in the R&D to come up with innovative brew and blends, Madhav added.

Coffee Day also has its presence in a few international markets where it operates exclusive via the franchisee model.

"All our international expansion comes through franchisee model... we operate in Malaysia, Egypt, Austria and the Czech Republic," added Siddhartha.