Standard Chartered Private Equity is set to invest about Rs 300 crore in Varun Beverages Ltd (VBL), owned by serial entrepreneur Ravi Kant Jaipuria.
Jaipuria, who owns the company through his holding company, RJ Corp, is expected to dilute less than 10 per cent in VBL, PepsiCo’s largest bottler in South Asia.
The beverage division of RJ Corp, which reported revenues of Rs 800 crore in 2010-11, enjoys a market share of more than 50 per cent. The group, which has nine bottling and manufacturing plants in India and Nepal, produces and markets 30 per cent of PepsiCo’s business in India.
Under a license agreement signed in 1991, RJ Corp became PepsiCo’s largest bottling business partner in India through Varun Beverages. Varun manufactures and markets carbonated and non-carbonated soft drinks, and package drinking water under the Pepsi brand. The beverage portfolio includes Pepsi, 7 UP, Miranda and Mountain Dew, Aquafina, Tropicana and Slice.
Nainesh Jaisingh, managing director of Standard Chartered PE, could not be reached for comments, while Ravi Jaipuria did not respond to queries. According to sources, the deal is expected to be announced in a couple of weeks.
In an earlier interview with Business Standard, Nainesh Jaisingh had said, “In the consumer space, there are limited good quality companies. Brand-owning and direct consumer-facing companies are commanding extremely steep valuations, and investors want a piece of the Indian consumer story. With half-a-dozen more of these companies, you might find valuations being more sensible.”
Apart from bottling, RJ Corp has interests in beer, foods, healthcare and education. Its subsidiary Devyani International Ltd is engaged in running Pizza Hut, KFC, Costa Coffee and Disney Artist outlets in India. It also has a joint venture (JV) with global beer giant Anheuser-Busch InBev (AB InBev).
