Officer's Choice maker plans Rs 500-cr pre-IPO fundraising

ABD is in final stages of negotiations to acquire three bottling units in three states

Allied Blenders & Distillers (ABD), the flagship company owned by Kishore Chhabria, is in discussions with non-banking financial companies (NBFCs) to raise Rs 400-500 crore in a pre-initial public offering (IPO) fundraising. The proposed fund will be used for expansion — acquiring bottling plants and setting up plants in states.

ABD, owner of largest selling whisky in the world,  Officer's Choice, is expected to enter the public market by 2016. ABD promoters will dilute about 10 per cent stake to raise Rs 600 crore in the IPO. As part of preparations for the IPO, the company is expanding the business with an investment of Rs 1,200 crore. ABD is in final stages of negotiations to acquire three bottling units in states Tripura, Odisha and Telangana.

Deepak Roy, executive vice-chairman & chief executive, ABD, said, "We are in final discussions to appoint merchant bankers for our fundraising process. The money will be deployed to strengthen our supply chain across the country."

The bottling plant in Telangana has a capacity of 200,000 cases per month while those in Tripura and Odisha have a capacity of 50,000 cases per month each. The company is setting up a plant at Andhra Pradesh at Rs 300 crore.

ABD is expected to achieve a sales of 32 million cases (a case comprises nine litres) by March, up from 25 million cases in FY14, largely driven by the sales of Officer's Choice whisky. Officer's Choice whisky sales is expected to cross 23 million cases in FY15, while newly launched Officer's Choice Blue is expected to top seven million cases and OC Black 200,000 cases. OC Brandy is also expected to reach sales of seven-800,000 cases by March. The sector has seen a growth of three per cent, with sales of 304 million cases in FY14. Last year, the Business Standard had reported ABD's plan to enter the premium whisky segment in 2015 by launching a brand which would compete with Blender's Pride and Signature.

In the semi-premium space (dominated by McDowell’s No 1 and Imperial Blue) and semi-premium plus space (dominated by Royal Stag), ABD had launched Officer's Choice Blue and Black, respectively.

At present, premium whisky market in India is dominated by two brands - Pernord Ricard's Blender's Pride and USL's Signature. Blender's Pride holds 45% market share while Signature holds about 18% share. Of 304 million cases Indian Made Foreign Liquor (IMFL) market, whisky is at the top with 172 million, out of which premium whisky holds 7 million cases.

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