Four years after checking into Subway, Everstone eyes a part exit

Mint

29-04-2025

Everstone Capital, which operates the master franchise of Subway restaurants in India, is looking to sell some of its stake in the fast food chain's local operations as part of a $100 million fund raising, three people familiar with the matter said.
Eversub India Pvt. Ltd, which operates the Subway outlets, has appointed Lodha Capital Markets to help with the process, the people said on the condition of anonymity, adding discussions to bring in new investors are under way.
The Subway fund raising will be a mix of primary and secondary shares, the people said. 'While Everstone will offload some of its stake in Subway in tranches, it will hold till the company taps public markets in India over the next two years," one of the persons said.
While Everstone declined to comment, Subway did not respond to Mint's emails at the time of publishing. A spokesperson for Lodha said, 'This news appears to be wrong and unsubstantiated."
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Everstone, which operates the master franchise through Eversub India, has the right to open and operate Subway restaurants in India, Sri Lanka, and Bangladesh.
A master franchise refers to an agreement between the franchisor (or company owner) and an organization to manage and expand its presence within a specific area.
Everstone's exit plans come nearly four years after the Singapore-based private equity firm invested an undisclosed sum in the food chain to facilitate its expansion in India and South Asia. With this move, other new investors are likely to come in to bolster Subway's future growth plans while Everstone will monetises some of its stake.
The food chain entered India in 2000 with the opening of its first store in Saket, Delhi. The company initially operated as a franchise-owned business, until Everstone acquired the master franchise in 2021. Subway India planned to more than triple the number of restaurants in the region in 10 years from the nearly 700 locations it had in November 2021.
Everstone has developed expertise in growing and building food brands in India and South Asia. Within the quick service restaurant space, it has been a master franchisee of Burger King India, Burger King Indonesia, and Domino's Indonesia, among other investments in this space.
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According to Subway India's official website, India is the largest market for Eversub and it is focused on expanding its footprint aggressively. The company has the master franchise rights to open and operate Subway restaurants in India, Sri Lanka and Bangladesh.
In FY24, Eversub India's revenue grew to
₹
366.1 crore from
₹
283.5 crore in the previous year, while it fell to a loss of
₹
33.9 crore from a profit of
₹
69.6 crore in FY23, according to data from market intelligence provider Tracxn.
Eversub India is a fully owned subsidiary of Culinary Brands Pvt. Ltd, which owns and operates some of the fastest growing food and beverage brands–both global and local–across the Indian sub-continent. Its portfolio includes coffee brands such as Lavazza (Italian) and Fresh & Honest (Indian).
Subway was founded in 1965 by 17-year-old Fred DeLuca and family friend Peter Buck in the US. In 1974, DeLuca and Buck decided that franchising was the best way to speed up the chain's growth—a model it has replicated in markets globally.
The chain that sells sandwiches, wraps, salads, and bowls already has a presence in 100 countries through a network of 40,000 restaurants. Subway restaurants are owned and operated by Subway franchisees, a network that includes more than 20,000 entrepreneurs and small business owners globally. It is among the largest restaurant chains globally, in terms of the number of stores.
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India's QSR sector has seen significant deal activity. While
Devyani International
Ltd, which operates brands such as KFC, Pizza Hut, and Costa Coffee through franchise agreements, announced its plan to acquire homegrown chain 'Biryani by Kilo', Wow! Momo is in talks to raise $80-100 million in a new funding round. Chennai-based QSR chain Adyar Ananda Bhavan is also looking to tap private equity (PE) funds to raise
₹
1,000-1,200 crore, Economic Times reported last year.
India's food services market, valued at $80 billion in 2024, is set to grow at a CAGR of 10-11% through 2030, with the organized sector driving this expansion, according to a report published by Redseer Strategy Consultants in January. As consumer preferences evolve, the rise of online food delivery and organized dine-in establishments will also reshape the landscape, the report said.
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