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Kishore Chhabria-promoted spirits maker Allied Blenders and Distillers (ABD) is looking to raise around Rs 800 crore in a pre-initial public offering (IPO) fund-raising as the company looks to strengthen his manufacturing and supply chain capacity before going public.
The company is in talks with non-banking financial companies to raise the money. This is a marked departure from its earlier strategy to tap private equity (PE) firms to raise funds.
“The company is looking at pre-IPO funding of Rs 700-800 crore. While earlier the company did consider raising money from PE funds and we did get two term sheets from leading PE companies, it was subsequently decided not to raise money from PE firms,” Utpal Ganguli, vice-chairman, told Business Standard. The company has appointed JM Financial as the advisor for the purpose.
ABD’s listing expected in the next 18-24 months. ABD plans to raise Rs 1,200 crore through the IPO.
“Most of the funds will be employed towards acquiring bottling and distillation units,” said Ganguli said.
The company has acquired bottling plants in West Bengal, Odisha and Punjab and is also building a new bottling site in Haryana. The firm is also in final stages of concluding a purchase of distillation unit in Telangana and a bottling unit in Hyderabad.
“Most of the funds will be employed towards acquiring bottling / distillation units, while some money is also being deployed to modernise and expand our existing bottling plants,” said Ganguli.
ABD reported sales of 32 million cases in FY15, a 28 per cent increase from 25 million cases in FY14. One case contains nine litres of spirit.
Its flagship brand Officer's Choice whisky registered a 16 per cent growth, taking its market share to 37 per cent of the regular whisky segment, while ABD's semi-premium whisky Officer's Choice Blue, sold seven million cases, within three years of its national launch. Its recent launch OC Black in the semi premium segment has also gained double-digit market share in some markets.
The company, which still does not have presence in the premium whiskey segment, plans to do so in the current financial year, said Ganguli. According to analysts, the premium whiskey segment offers greater potential in spite of higher material costs.
