Tea cafe chain Chai Point is planning to go public and list on the stock market by the middle of 2026, co-founder Tarun Khanna said. The popular chain sells almost a million cups of tea every day, according to the firm.
The tea chain achieved a special milestone in the Maha Kumbh as it sold almost a lakh cups of tea a day from its limited-edition outlets during its peak.
Conceived in 2009 when Khanna, a professor in Harvard University, was sipping a hot cup of tea at a cafe in Mumbai with his student Amuleek Singh Bijral.
"On the roadside, there was a young boy selling tea in plastic cups to customers. Such 'chotus', as they are called, serve tea to millions in not-so-good plastic cups and not in the most hygienic conditions. A thought occurred as to why can't we bring authentic, flavourful, and high-quality tea to the masses in the most hygenic ways at an affordable price and at the same time also provide employment to the chotus," he said.
That was the germinating point of Chai Point which opened its first outlet in Koramangala in Bengaluru in 2010. Today, the firm sells over 9,00,000 cups of freshly brewed tea, along with a variety of snacks like sandwiches, pakoras and other comfort foods, at rates that are way lower than big cafe chains.
"When Amuleek and I co-founded the venture, we had 5 employees – most of them store staff," Khanna said, recalling the journey of Chai Point.
Two years later, Chai Point started expanding outside of Bengaluru and opened up stores in Delhi first and eventually expanded to Mumbai and Pune.
"We now have over 170 stores and counting," he said. "In the next 2 years, we plan to open another 300 stores," he added. Its model is both walk-ins and sitting area format. It now also does deliveries. Out of the 170 stores, 60 stores have seating areas while the remaining 110 are walk-ins.
"Chai Point is rooted in India's tea culture. Its appeal is for those who appreciate the rich flavours and cultural significance of chai," Khanna said.
"Just like Coke or Pepsi, we also have our secret formula for brewing that special tea. People often say their mothers make the best tea and I would not hesitate to say the taste of Chai Point is close to 8 or 9 on that scale," he added. Chai Point's motto "India runs on Chai" is apt for Indians' love for tea. It now offers several types of teas and its bots or tea dispensing machines – are capable of storing information on how a person may want his tea to be made with details like quantity of sugar and other add ons.
It now has presence in multiple Indian cities with presence across retail locations, airports, and business parks. In addition to physical format stores, the chain has a delivery service and a vending based solution called 'Vending as a Service' focused primarily at corporates.
Chai Point installs and services bots at institutions such as offices and hospitals.
Unlike other similar beverage chains which run on a franchise model, Chai Point runs on a company-owned store Model.
It also has received offers to open outlets abroad but the firm is taking its time to decide the right entry strategy.
"We are right now building 10 stores a month and deploying 500 bots per month. Goal is to go to 20 stores a month and 750 bots per month in the next one year," he said. "Currently we are close to 1,400 employees. Each store brings in 6 more employees and this is where 95 per cent of employee growth will happen." The firm is deploying 500 + bots on a monthly basis and wants to take it to 750 bots in the next 12 months.
"We sell close to 9,00,000 cups of tea daily," he said. At the Maha Kumbh, "a little over 1 lakh cups of tea were sold every day at Kumbh in the prime days. The number is coming down gradually." Chai Point is looking at a primary plus secondary capital round in this fiscal year, he said without disclosing details.
"We are already EBITDA positive and we intend to stay that way going forward. We are looking to be PBT (Profit Before Tax) cash flow positive in the next 4-5 months," he said.
Asked about listing plans, he said, "We are working towards getting listed and we are aiming to get listed by May 2026." Presently, founders, employees and early angels have close to 25 per cent in the company. Rest is with institutional investors.
But the journey for Chai Point has not been all that smooth. Covid hit operations badly with sales drying up. Many left the firm to join larger companies," Khanna said.
"We had to build the tech team from scratch. We shifted the supply chain from China to India for the manufacturing of bots," he said.
On the tech advancements used in bots, Khanna said, "We are redefining how India experiences tea and coffee' bringing together cutting-edge AI, IoT (Internet of Things), and cloud technology to ensure a perfectly brewed cup, every single time." "With over 5,000 + smart brewing machines deployed across the country and counting, we are leading the transformation of beverage dispensing, setting new benchmarks for speed, quality, and convenience in workplaces, retail hubs, and high-footfall public spaces," he said.
The innovations include tech-driven consistency and real-time monitoring, remotely updating recipes and ensuring every cup meets Chai Point's gold standard of taste.
Also, it monitors real-time data, including consumption patterns, ingredient levels, and error logs. This prevents breakdowns proactively, using AWS and GCP cloud platforms for predictive maintenance.
Bots stream operational metrics, allowing data-driven decision-making for improved efficiency, he said. "By harnessing AWS streaming services, we capture every critical data point in real time, enabling continuous performance optimisation and reliability."
With PTI inputs
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