John Distilleries, the Rs 800 crore Bangalore-based distilling firm, is looking to raise Rs 150 crore through the private equity route to fuel its capacity expansion. The company is in discussions with a UK-based private equity fund for this infusion by diluting not more than 25 per cent. Interestingly, this is the PE fund which initially funded Foster's beer during its growth stages.
Paul P John, chairman, John Distilleries, confirmed these discussions without spelling out the investor and said that the deal should be bottled up within the next six months.
"We are in talks to acquire distilleries in Maharashtra and Andhra Pradesh which has a capacity to distill 300,000 cases a month. This will cost around Rs 150 crore as we expand our presence across India," said John.
The company is working on a gameplan to cumulatively increase its capacity to 9 million cases a year from the current 7.5 million cases. John started out as a spirits distributor before starting out on his own 13 years ago.
The company which plays the volume game, sells the widely accepted whisky brand Original Choice, by selling in the retail market anywhere between Rs 170 - Rs 220 for a 750 ml bottle.
More From This Section
The company distills whisky at 14 locations of which three are owned distilleries.
John Distilleries currently derives majority of its sales from Karnataka, Andhra Pradesh, Kerala and Maharashtra and is expanding its presence to Chattisghar, Rajasthan, Chandigarh, Haryana and Punjab.
Parellaly, this firm which recently entered the wine market is looking to expand its presence in this segment.
"We have a small operation for wine which sells around 15,000 cases a year and expect to increase this to around 25,000 cases this year," noted John.
The company sources grapes from Sangli in Maharashtra.
John Distilleries in addition to its liquor business is also expanding its hospitality business.
The company currently has properties at Kumarakom in Kerala and one in Bangalore and is looking to set up properties at Coorg and either at Maldives or Mauritius.