Coffee Day raises $51 million from cornerstone investors

The company behind Cafe Coffee Day, India's biggest coffee chain, has raised 3.34 billion rupees ($51 million) from "cornerstone" investors ahead of the formal opening of the country's biggest stock market flotation in three years.

Coffee Day Enterprises Ltd, which competes with Starbucks Corp among others in India, is backed by private equity firm KKR & Co. It will launch its share sale to retail and institutional investors on Wednesday.

Cornerstone investors - guaranteed a major share of the offering regardless of the final price - for the sale included Blackrock and Merrill Lynch Capital Markets, as well as Reliance Life Insurance Co, Axis Mutual Fund, and the fund management unit of ICICI Prudential, Coffee Day said on Tuesday.

Coffee Day has allotted 10.38 million shares to cornerstone investors at 322 rupees apiece, the company said. The indicative price band for the offering has been set at between 316 rupees and 328 rupees a share.

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