Moreover, generational wealth and businesses are exchanging hands within family-run businesses, prompting many entrepreneurs to sell parts of their business and creating more instances for buyouts, said Rajiv Batra, director and consumer sector lead at ChrysCapital, said.

“We see the share of buyouts increasing in the next 5-7 years. As long as there are strong underlying trends and a good team, we will evaluate both minority investments as well as buyouts in the space.”

He added that the availability of talent—especially those that are being groomed by large multinational companies and Indian conglomerates—is on the rise. “This gives us the confidence that if a buyout or control deal is available and we get the right talent, it’s worth pursuing.”

ChrysCapital’s thesis comes on the heels of its acquisition of desserts chain Theobroma for an 85% stake, marking its first buyout in the consumer sector, it said on Wednesday. It is also the firm’s first transaction in the consumer foods space. The deal reportedly values the Mumbai-based quick-service restaurant (QSR) chain at ₹2,400 crore. Batra declined to comment on the valuation.

Currently, the firm has no plans of drastically changing how the patisserie chain operates, given that it believes that Theobroma is at the centre of the Western dessert opportunity in India. “With the existing management team as well as the founders with their 15% stake, we should be able to work together to create strong outcomes for everyone in the coming year,” said Batra.

The PE firm previously invested in Wow Skin Care and kids’ retailer FirstCry in the consumer segment.

In September last year, Mint was the first to report that ChrysCapital was among the three private equity firms to have submitted binding bids to acquire Theobroma Foods. In March, Mint reported that the homegrown investment firm is poised to acquire a controlling stake in the bakery chain for ₹2,200-2,300 crore.

The Theobroma acquisition

Founded in 2004 by sisters Kainaz Messman Harchandrai and Tina Messman Wykes, Theobroma has grown from a single Colaba café into a pan-India Western desserts platform, operating nearly 250-plus company-owned outlets across 45 cities. Known for its brownies, cakes, and patisserie offerings, Theobroma has created a premium positioning in the quick-service restaurant segment.

In fact, the brand’s positioning as a ‘mass premium’ offering is what attracted ChrysCapital to the company in the first place. “They have a very good premium connect, at least in the metros. The business has gone beyond metros to tier-2 cities in the last few years. We’re looking at both markets to scale the business even further,” said Batra. “You can’t ignore one versus the other. On the mass side, you still have a large part of the belly of the India market that is waiting to be tapped.”

ChrysCapital’s traditional holding period for companies that have strong economics and are growing well is between 5-6 years. However, the firm didn’t say what sort of returns it was expecting a company like Theobroma or future investments from the sector to provide.

ChrysCapital is looking to double down on the QSR segment, with emphasis on India’s growing affinity for cafes and gourmet offerings. The firm has noticed that Indian consumer behaviour has shifted as well, with more people seeking out organised, experience-led food consumption. “I am hoping a good player emerges in the Mexican and Chinese cuisine segment, that can give a good luxury experience for Indian consumers at scale,” Batra added.

The firm is inching closer toacquiring homegrown desserts chain The Belgian Waffle Co., in a deal that values the nine-year-old company at ₹1,300 crore, Mint reported in August last year. If it goes through, it’ll be the second premium QSR brand to be added to ChrysCapital’s portfolio.

“We had been spending a lot of time on relevant deals in QSR, but luck was not on our side. We did make a play at 2-3 of these [companies] but were not able to get to the finish line either basis price or sometimes even conviction. All these things worked in our favour this time,” according to Batra.

New fund target

Armed with a $2.2 billion new fund that it raised earlier this year, ChrysCapital is looking to write larger cheques and build a bigger portfolio in India.

“QSR is a space we have tracked closely, and there are enough examples in India and around the world where firms have made money. There’s also a noticeable shift from Indian desserts to Western desserts, so we were looking for opportunities, keeping in mind this macro trend,” he said.

Shardul Amarchand Mangaldas and Co. served as Chryscapital’s legal counsel on the Theobroma deal, and Deloitte was its financial and tax advisor.

Founded in 1999, ChrysCapital has raised nearly $8 billion across 10 private equity funds, a continuation fund, and a public markets fund. From its private equity funds, ChrysCapital has invested $5.5 billion in more than 100 deals and realized almost $8 billion from over 80 exits.