From footpath to 20,000 cups a day: Babu Rao's incredible Hyderabad chai story

A young man who left home to chase his dreams ended up serving tea to the people of Hyderabad. The very thought behind his vision became the credibility of the café he dreamed of building. Today, the café serves over 20,000 cups of chai every day and has nine outlets across the city.Anumula Babu Rao's journey traces how a tea stall opposite Niloufer Hospital became Café Niloufer."I would never serve a customer anything that I won’t eat/drink. I have always believed in quality over quantity. And despite bearing losses, Niloufer never compromised on the quality of our tea, cookies or any other product," says the owner of Caf Niloufer.Babu Rao, the legendary character from the Hera Pheri movie series, needs no introduction. The memes have made sure of that. But the Babu Rao we are talking about here is not a film character.He is a real person, Anumula Babu Rao, the man who helped turn a small tea stall in Hyderabad into what is now known as Cafe Niloufer.The young man who came without a ticket from Adilabad in 1975 with a dream made the cafe Niloufer, the identity of Hyderabad. It is a story of a young man with little to his name, a strong belief in good tea and a simple idea: if you serve something to people, you should first be happy to have it yourself.From sleeping on footpaths to building a cafe known across Hyderabad, Babu Rao's journey is not only about business. It is also about a name, a responsibility and a cup of chai that became part of the city's daily life.IT STARTED WITH A SMALL TEA STALL When Babu Rao became associated with Cafe Niloufer in 1976, it was a small tea stall opposite Niloufer Hospital.But Rao's journey in Hyderabad had started somewhere else.His first job in the city was at a textile store. After spending a few months there, he moved to a restaurant, where he got his first opportunity to understand how a food business worked from the ground up.Rao started there as a waiter. His responsibilities, however, went well beyond serving customers. He swept the premises and washed utensils whenever required.Over time, his work earned the confidence of the cafe's owner, who eventually asked Rao to take charge of running the establishment. When the owner later decided to end the arrangement, he handed over the cafe to Rao.The caf's official history identifies 1978 as the year Babu Rao founded Cafe Niloufer.That small establishment would eventually become one of Hyderabad's best-known tea destinations.For much of its early history, the cafe's offering remained focused on two familiar items: Irani chai and Osmania biscuits.There was no large menu to attract customers. The tea itself was the draw.And perhaps that is an important part of the Cafe Niloufer story. Before the multiple outlets, large spaces and expanded menu, there was simply a cup of chai that people kept coming back for.20,000 CUPS, 700 CUSTOMERS AND THE IRANI CONNECTIONBy 1993, Rao had acquired the cafe completely.That brought him to another important decision. He could have changed the name. He chose not to do that, simply giving importance to the legacy which had followed in the next 3 decades.A 2026 case study published by SAGE gives some indication of how far the cafe's business grew. It notes that the original outlet was once selling around 20,000 cups of ready-to-drink Irani chai every day.The identity of the cafe, its name, has some unique connection with the Ottoman Empire.Princess Niloufer Khanum Sultan, who was born into Ottoman royalty in 1916 and later married into the family of the Nizam, who then ruled Hyderabad.The Niloufer Hospital, which was established in her name, became known for serving women and children. The word Niloufer comes from Persian and refers to the blue lotus or water lily.Spread across 40,000 square feet and three floors, the outlet can accommodate more than 700 customers. It also features a two-tonne sculpture called the "Kettle of Love."Today, the caf says it has nine outlets across Hyderabad.SO, WHAT MAKES NILOUFER NILOUFER?The answer starts with the obvious one: chai.Irani Chai remains at the centre of the cafe's menu. Rao has maintained a close watch on the tea-making process and, according to the caf, personally oversees the blending of the tea powder.Then there are the Osmania biscuits, a familiar partner to a cup of Irani chai. And, of course, the Maska Bun.Perhaps that is why the story of Babu Rao is worth looking at beyond the success of a caf.The name Niloufer had a history before Babu Rao took charge.Today, when a customer walks into Caf Niloufer in Lakdikapul or Hitech City, they may simply be looking for a cup of chai.But behind that cup is a story that began nearly five decades ago, with a young man, A Babu Rao, in a small tea stall and the belief that something served to others should first be good enough for yourself.- EndsPublished By: Rishab ChauhanPublished On: Aug 17, 2026 15:03 IST