Allied Blenders may raise Rs 200 cr via PE route

Leading spirits company, Allied Blenders & Distillers (ABD), plans to tap the private equity route to raise Rs 200 crore in the next 18 months to fuel its expansion, a top company official has said.

The company, in which Mr Kishore Chhabria and Mr Deepak Roy, own 95 per cent and five per cent stakes, respectively, could dilute up to ten per cent stake for the purpose, he said.

“We are likely to raise Rs 200 crore in the next 18 months through the PE route. The money will be used to propel our expansion,” the ABD Executive Vice-Chairman & CEO, Mr Deepak Roy, told PTI here.

The company, which makes the popular Officer’s Choice whisky and Gorbatschow vodka, is willing to dilute up to 10 per cent, he said, without disclosing further details. “Much would depend on the valuation we get. Things are still in the thought-process stage — it will take us sometime to get cracking on this,” he said.

The company plans to use the funds to set up at least three more bottling units besides building up its distillation capacity.

In another strategy-shift, ABD plans to reduce its heavy dependence on Officer’s Choice whisky which at present contributes 92 per cent of its total sales volume.

“We plan to increase the contribution of our other products such as vodka, rum, brandy and even whisky in different segments over the next three years. By then, Officer’s Choice whisky’s share of sales volume should be around 75 per cent,” Mr Roy said.

There would be no defocus on Officer’s Choice — it will grow but the company would also be growing its other products faster, he said.

The company plans to utilise the funds raised through private equity to create distillation capacity.

“We want to create distillation capacity — we now buy spirits which makes us vulnerable to price increases or shortages. We want to have at least a 30 per cent distillation capacity in-house in the next two years,” Mr Roy said.

Similarly, it wants to enhance its in-house bottling capacity to 70 per cent from the current 28 per cent. “In three years, we want to up this to 55 per cent and in five years to 70 per cent,” he said.

The company, which has been growing at a CAGR of 30 per cent-plus in the last four years, sold 16.5 million cases in FY 11. “In six years, we aim to up this to 50 million cases, a very achievable target given our track-record of high growth,” Mr Roy said.

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