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The Kishore Chhabria-led Allied Blenders and Distillers (ABD) is looking to acquire majority stake in Tilaknagar Industries. To fund the acquisition, ABD has started raising $200 million.
The move will give ABD a strong foothold in the brandy market and, consequently, good presence in the southern part of the country, as that region is the biggest market for brandy in India.
The Mansion House brand from the Tilaknagar stable is the world’s second-best-selling brandy label.
ABD has three brandy brands — Kyron Premium Brandy, Lord & Master and Officer’s Choice.
Speaking to Business Standard, ABD’s executive vice-chairman and chief executive, Deepak Roy, said, “We are looking at it (majority stake in Tilaknagar Industries). Our efforts are on... let’s see if it materialises.” He clarified the company wasn’t interested in acquiring any other company at the moment.
Roy said he was in discussion with private equity majors Carlyle and TPG to raise about $200 million, adding this might be finalised in the next few weeks.
Recently, ABD had acquired 100 per cent stake in Wales Distilleries in West Bengal and announced its foray into the US market.
Tilaknagar has been keen to rope in investors to reduce debt; offloading stake is being seen as a move towards that end. According to people in the know, the company’s debt is about Rs 600 crore.
An email sent to Tilaknagar Industries remained unanswered.
Tilaknagar manufactures, markets and sells about 40 brands across price ranges. In 2012-13, it had recorded sales of 13.8 million cases, a four per cent rise compared to the previous year. Promoters, including Chairman & Managing Director Amit Dahanukar and his family, hold 56 per cent stake in the company.
Vodka share
ABD, which has strong presence in the vodka segment, has been trying to focus on the premium segment to increase market share. “The vodka segment is still under some stress,” Roy said. In 2013, brandy sales had seen a double-digit rise in India. Consumers moving to lower-priced spirits such as brandy have resulted in stagnation in the vodka market.
ABD has tweaked its portfolio, with a touch of premiumisation in the whisky segment, introducing semi-premium whisky Officer’s Choice Black. In 2012, it had launched Officer’s Choice Blue, which had recorded sales of a million cases within a year.
