Adyar Ananda Bhavan, the Chennai vegetarian restaurant and sweets chain better known as A2B, has sold a majority stake to Bodhi Tree Systems for $180 million, Business Standard reported on Thursday, Nov. 12. The investment platform set up by James Murdoch and former Star India and Disney executive Uday Shankar will take control of a family business that runs about 160 outlets in India and more than 30 overseas.

The price puts the deal among the largest in India's food services sector, according to Business Standard. The exact size of the stake was not disclosed. The News Minute, citing an industry source quoted by The Hindu, put A2B's valuation at about $350 million, and said the sale amount works out to more than 1,600 crore rupees. For investors in Asia, the transaction is a test of whether family-run regional food brands in India can be professionalized and taken to the stock market, a path that has drawn growing interest from private capital.

What Bodhi Tree is buying

A2B traces its roots to a single sweet shop opened in Chennai's Washermanpet neighborhood in the late 1970s, The News Minute reported. A second outlet, in Adyar, became central to the brand's identity. It now sells South Indian vegetarian meals in its restaurants and sweets and savory snacks through retail stores and online, and employs more than 15,000 people, according to both outlets.

Its overseas outlets are in markets including Singapore, the United States, Australia, Malaysia and the United Kingdom, The News Minute said. Business Standard put the international count at 32 outlets. Neither outlet reported revenue or profit figures.

The business was started by brothers K.T. Srinivasa Raja and K.T. Venkatesan, its co-founders, according to Business Standard. Venkatesan said the plan agreed with the new investor will make A2B "a company fit for the public markets," according to the newspaper.

Shankar will chair A2B's new board, a step both outlets described as a move toward professional management. Murdoch's Lupa Systems backs Bodhi Tree, The News Minute reported.

Bodhi Tree's third bet in India

A2B is the third investment for Bodhi Tree, which was founded in 2021. Its first was a 36% stake in coaching company Allen Career Institute for $600 million in May 2022, Business Standard reported. In 2023 it became a strategic investor in JioStar, the media venture.

The food chain is a different kind of asset for the platform: a consumer brand with nearly five decades of history with kitchens, factories and stores. Shankar said in comments reported by Business Standard that the goal is to take the chain's cuisine to "a far broader global audience."

The plans reported so far focus on operations. The partnership will work on leadership and hiring, digital capabilities, modernizing kitchens and manufacturing, and expanding healthier food lines, according to Business Standard. The News Minute said A2B is looking at western India and Europe for new outlets, plans to grow its retail business, and will upgrade its factories in Chennai and Bengaluru while weighing an additional plant to serve retail and export demand.

A long roster of advisers worked on the deal. Veda Corporate Advisors was A2B's exclusive financial adviser and Khaitan & Co. its legal counsel, Business Standard reported. On Bodhi Tree's side, Ernst & Young handled financial and tax due diligence, Alvarez & Marsal commercial due diligence and Trilegal the legal work, with Moelis & Co. as transaction adviser.

Private capital moves into regional food brands

Many Indian restaurant and packaged food companies remain closely held by founding families, while listed restaurant operators such as the Indian franchisee of Burger King, which reported its first profit, give investors a public reference point.

Balachandar R, director of restaurant chain Junior Kuppanna, told The News Minute that regional brands such as A2B and Haldiram's have only begun to tap private equity and public markets. He said he expects at least 100 food and beverage brands to list over the next decade. He advised on an earlier deal in the segment: the 2019 investment in Dindigul Thalappakatti, which raised 260 crore rupees from CX Partners.

A2B's deal is far larger than that one, and the stated aim is a listing. Neither outlet reported a timeline, size or venue for an initial public offering, and no filing has been made. The next concrete signals for investors will be the composition of the new board under Shankar and any announcement on the additional manufacturing plant, which would show how quickly Bodhi Tree intends to put its capital to work.