BENGALURU: Cafe Coffee Day founder VG Siddhartha is seeking a valuation of between Rs 8,000 crore and Rs 10,000 crore from Coca-Cola for the coffee chain he set up over two decades ago, according to people directly aware of the development, while also aiming to retain a controlling stake in the business. The US beverages maker is in talks with Siddhartha for a slice of equity in the coffee retailing business headquartered in Bengaluru, as reported by ETon Thursday.“The promoters are asking for a valuation of between four to five times of sales (in the coffee business) on the back of some valuation trends in the industry both companies are privy to,” said a source in the know of the matter.The group’s coffee business expects to close the year ending March 2020 with sales of about Rs 2,250 crore, according to a senior company executive. The business, which includes some exports of the bean, had revenue of Rs 1,777 crore and Rs 1,814 crore in fiscal year 2018 and 2019, respectively, according to regulatory filings. CCD, set up in August 1996, has grown to include 1,750 stores across India with 60,000 vending machines. It also has outlets across Europe as well as in Malaysia, Nepal and Egypt.Siddhartha was not reachable for a comment. Coca-Cola India, in an email response said: “This news is absolutely speculative in nature and as a matter of company policy, we do not have any comments to offer at this point in time.”Experts are of the view that for Coca-Cola, an investment in CCD means access to retail outlets nationally. “CCD is the only pan-India coffee retail chain, the rest have not been able to scale to its level,” said Siddharth Khemka, head-retail research, Motilal Oswal Financial Services Ltd “While Starbucks is doing good, it doesn’t have so many outlets,” Khemka said. “This also would fit with the strategy of Coca-Cola to diversify into other products considering that there is growing awareness against sugary and carbonated drinks,” he said. As one of the country’s largest individual coffee planters, Siddhartha heads a coffee plantation group with over 20,000 acre and is “bullish on coffee consumption trends in India”, said one of the people cited above. The group expects India to emerge as the third-largest coffee market after the US and China in 20 years.Brand consultant Harish Bijoor reckons the Indian café segment will triple in the next decade even by a conservative estimate “going by the way the country is getting to be outdoor-consumption oriented”, he said.“There is social-ostracism in cola category, and that would be why Coke is looking for a footprint in the staple beverages market,” he added. However, the country is facing a drop in production of quality Arabica beans that has fallen from 1,20,000 tonnes five years ago to 95,000 tonnes in 2019, according to official data.Siddhartha, an early investor in mid-tier IT services firm Mindtree sold the 20.4% stake held by him and his associates to L&T at Rs 980 per share, earlier this year. (With inputs from Raghu Krishnan in Bengaluru)