CASE STUDY · OPERATING LEASE
₹50 Cr of new outlets.
No term loans.
How one of India's leading food and hospitality brands fitted out multiple new outlets on a 36-month operating lease, with the balance sheet clean and borrowing capacity intact.
CAPEX FINANCED
₹50 Cr
TENURE
36 months
STRUCTURE
Operating lease
ASSETS COVERED
Interior fit-outs
THE CLIENT
An iconic Indian food and hospitality brand.
The client has a diverse presence across restaurants, retail stores, packaged food and FMCG, with a footprint expanding across metros and tier-2 cities.
Its 2025 rollout plan called for opening and refurbishing a large number of stores with high-quality interiors and fit-outs, fast, and with minimal impact on leverage or operating liquidity.
Client name withheld for confidentiality.
CLIENT PROFILE
₹10,000 Cr+
Annual revenue
15,000+
Employees
5+
Manufacturing units
100+
Retail outlets
THE CHALLENGE
A big rollout,
without a big loan.
A large store rollout meant a heavy fit-out bill up front, just as the brand wanted to keep its balance sheet light and its borrowing capacity free.
Large CapEx for interior fit-outs
Display units, counters, furniture and modular workstations needed significant upfront investment.
Avoiding traditional debt
Term loans for interiors would burden the balance sheet and use up borrowing capacity.
Tax inefficiency of CapEx
Capitalised fit-outs offer only limited depreciation benefits, raising the tax burden during growth.
HOW CAPEXO STRUCTURED IT
Fit-outs on lease, off the balance sheet.
Capexo financed the interiors and leased them to the client for 36 months, turning a large capital outlay into a predictable operating expense.
01
Capexo financed the fit-outs
₹50 Cr of modular counters, seating, partitions, ceilings, lighting, display systems and café furniture.
02
Leased over 36 months
An operating lease that kept the assets off the client's balance sheet under IGAAP.
03
Ratios improved, not strained
Higher return on assets, a better current ratio from CapEx-to-OpEx conversion, and no hit to debt-to-equity or TOL/TNW.
KEY BENEFITS
What the lease made possible.
Five gains the client saw from leasing its fit-outs instead of buying them.
100% tax-deductible rentals
Lease rentals were fully deductible, unlike the limited depreciation on capitalised fit-outs.
Debt-free expansion
New outlets opened without term loans, and the balance sheet stayed clean.
Better capital efficiency
Converting fixed assets to OpEx kept capital free for the core business.
Faster rollout
Outlets expanded quickly, with minimal financial strain.
Seamless end-to-end execution
One smooth process from financing to fit-out, across every location.
RESULTS
New outlets open.
Balance sheet clean.
The client executed ₹50 Cr of fit-out CapEx across multiple locations in record time. The leasing model delivered maximum tax efficiency, a better balance sheet position, and more confidence from bankers and investors for future fundraising.
Clean balance sheet
Financial covenants intact
Working capital preserved
Maximum tax efficiency
Stronger case for future fundraising
Planning your next store rollout?
Tell us what your outlets need. We'll show you how an operating lease could fund the fit-outs.