PepsiCo India's largest franchise bottling partner Varun Beverages, which is coming out with an IPO to raise Rs 1,113 crore, plans to use major portion of the proceeds to retire its debts.
The initial public offer of Varun Beverages, that entails sale of up to 2.5 crore shares, will open on Wednesday. The company has fixed the price band at Rs 440-445 per share.
At the upper end, the RJ Corp group company would raise close to Rs 1,113 crore through the offer.
"We would pay Rs 668 crore to repay our primary debts and the rest Rs 445 crore would go for OFS and the reason for that the last year the promoters have put CCPS of Rs 450 crore and they want that to be encashed," RJ Corp President and Group CFO Raj P Gandhi said.
The IPO consists of a fresh issue of 1.5 crore equity shares of Rs 10 each. Promoters are offloading 1 lakh equity shares of the company.
According to RJ Corp Chairman Ravi Jaipuria, the company has a "debt of around Rs 2,300 crore". In 2014, Pepsico India had sold its four plants in North India to Varun Beverages.
According to the company, "the offer will constitute 13.74 per cent of the post Offer paid-up equity share capital and the net offer will constitute 13.47 per cent of the post Offer paid-up Equity Share capital".
Post the IPO, the promoters would have 73.7 per cent stake in the company.
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