Daijiworld Media Network - Hyderabad
Hyderabad, Aug 17: When A Babu Rao arrived in Hyderabad from Adilabad in 1975 without a train ticket, he had nothing but a strong resolve to earn a living. Initially securing a job as a textile shop salesman, he spent his first 15 days sleeping on pavements and using the Nampally railway station waiting room to bathe.
Fast forward nearly five decades, the man who arrived in the city without a penny is now the driving force behind Cafe Niloufer, one of Hyderabad's most iconic tea brands.
What started as a modest cafe has blossomed into a massive food and beverage enterprise operating under ABR Cafe and Bakers Pvt Ltd. According to local media reports, the company is currently exploring external fundraising, bringing Rao's remarkable entrepreneurial journey into the limelight.
Following a brief stint at the textile store, Rao transitioned to a restaurant, gaining valuable insights into the food industry. A customer, impressed by his work ethic, recommended him for a job at the newly opened Niloufer Cafe.
He joined the establishment as a waiter, going above and beyond his duties by sweeping the floor and washing dishes when required. His dedication won the trust of the cafe's owner, who eventually handed over the management, and later the ownership of the cafe, to Rao. Official records mark 1978 as the year he officially founded Cafe Niloufer.
For decades, the cafe's strength lay in its simple menu of Irani chai and Osmania biscuits, building a fiercely loyal customer base. A 2026 case study published by SAGE highlighted that the original outlet once sold around 20,000 cups of ready-to-drink Irani chai daily. Today, the brand has diversified its offerings to include bakery products, cakes, snacks, and packaged teas like Platinum Tea Powder and Super Dust Powder.
Moving beyond the traditional tea-shop model, the brand has opened large-scale outlets to cater to diverse customer segments. The Hitech City branch, inaugurated in 2025 and spanning 40,000 square feet, was hailed as India's largest tea cafe at the time of its launch, featuring a seating capacity of over 700 guests.
This rapid expansion is reflected in the company's financial records. Data from Tracxn shows that ABR Cafe and Bakers' revenue surged by 47 percent year-on-year to approximately Rs 206 crore in FY25, up from Rs 24.76 crore in FY21—more than an eight-fold increase in just four years.
However, this growth involved heavy investments in expansion, which saw employee, rent, and commission costs rise. Consequently, the net profit margin reportedly declined from around 7 percent in FY21 to 3.8 percent in FY25. The data also indicates a leveraged capital structure, with a total debt of nearly Rs 1,727 crore against an equity of Rs 340 crore.
As the business enters a new phase, media reports suggest that the company is collaborating with advisors like PwC and Rainmaker Group to secure external investments. This potential transaction could push the company's valuation to anywhere between Rs 1,500 crore and Rs 1,899 crore.
For an entrepreneur who began his journey sweeping floors and sleeping on the city's footpaths, this staggering valuation signifies an extraordinary transformation from a small cafe to a monumental business success.