Private equity firm CX Partners is seeking to sell its majority stake in the popular Dindigul-style biryani chain, Thalappakatti Hotels. The proposed transaction aims for a ₹1,000 crore valuation, following the company's report of ₹406.2 crore in revenue for FY25. This move marks the end of a seven-year investment period for the firm, which originally acquired its stake in 2019.
Private equity firm CX Partners has begun the process of divesting its majority stake in the Tamil Nadu-based restaurant operator, Thalappakatti Hotels. The firm, which entered the business in 2019 with a ₹260 crore investment, is now working with Advay Capital to facilitate an exit after a seven-year holding period. The proposed deal aims to value the restaurant chain at approximately ₹1,000 crore.
Financial Growth and Valuation Trends
The anticipated ₹1,000 crore valuation marks an increase from the roughly ₹860 crore valuation recorded during the company's previous funding round. According to filings with the Ministry of Corporate Affairs, Thalappakatti Hotels reported operating revenues of ₹406.2 crore for the 2024-25 fiscal year, showing growth from the ₹340.3 crore reported in the prior year. Profitability also moved upward, with the chain recording a profit of ₹7.3 crore in FY25, compared to ₹4.4 crore in the preceding year.
The current valuation target reflects a revenue multiple of approximately 2 to 3 times. While the firm is pursuing a full divestment, the final deal structure—which may include a combination of primary capital infusion and secondary share transfers—remains subject to the profile and requirements of the incoming investor.
Scaling Operations in a Growing Market
Thalappakatti Hotels, which traces its origins back to 1957 in Dindigul, has scaled significantly under the guidance of third-generation leader Nagasamy Dhanabalan. The chain currently operates over 100 outlets across India, with a strong concentration in the southern states. The brand has focused on its core specialty of Dindigul-style biryani to drive customer demand and expansion.
The broader Indian food services sector has seen consistent interest from private equity and institutional investors, supported by a growing preference for branded dine-in experiences and the continued expansion of online food delivery platforms. Industry projections suggest the domestic food services market, estimated at $80 billion, is expected to maintain a steady compound annual growth rate of 10-11% through 2030. This growth environment has attracted various domestic and international investors to the space, with other regional chains also seeking fresh capital to fuel their expansion plans.
Future Monitorables
For investors and market observers, the next steps will involve the selection of an incoming investor and the finalization of the deal terms. Key areas to watch include how the company sustains its profit margins while managing the costs associated with scaling its outlet count across new geographies. The impact of this secondary transaction on the company’s capital structure and future expansion speed will also be a primary focus as the transition progresses.