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Allied Blenders & Distillers (ABD), the largest liquor company in the country, has shelved its plans to offload 12 per cent stake to TPG Capital and Carlyle Group and has instead decided to float an IPO.
“Now that the markets have opened up, we thought it would be better for us to go for an IPO in the next 12 to 18 months,” ABD’s vice-chairman and CEO, Deepak Roy, told Business Line .
ABD plans to raise up to ₹1,200 crore through the IPO. It plans to initially offload 10 per cent stake through the IPO.
Roy, who holds about 5 per cent stake in the company owned by Kishore Chhabria, said the proceeds from the IPO will be used to set up a slew of manufacturing plants as well as bottling plants across the country.
New plantsIt plans to set up four manufacturing and about 10 bottling plants. ABD does not own any manufacturing plants now but has four bottling plants and sources from 34 others. Part of the funds will also be utilised for expanding the liquor portfolio.
Last year, ABD bought a 50 per cent stake in the Mansion House brandy brand from the Dutch company, Herman Jansen Nederland NV, which allows it to market and distribute the brand in India. However, Tilaknagar Industries has been involved in a dispute with the Dutch liquor maker claiming that it owns the right to market and distribute the brand in India. Roy said he hopes to get the issues resolved with Tilaknagar soon.
The company’s Officer’s Choice, the largest selling whisky brand, has also performed well with the brand expected to cross the 24 million cases mark in sales this fiscal, posting an increase of 20 per cent over last year.
This is despite the category (popular) declining by 4 per cent because of fierce competition from premium brands. “We changed the positioning as well as the packaging to build the brand,” Roy said.
Roy said Officer’s Choice now has enough brand extensions to position itself as a premium player.
OutlookIts Officer’s Choice Black sells 7 million cases per year while Officer’s Choice Blue,a semi-premium brand posted sales of 3.5 million cases in 2014, the second year of its launch.
It also recently launched a vodka brand, Wodka Gorbatschow, through a joint venture with Henkell & Co. Its Class 21 vodka too is performing well in the market, Roy pointed out.
ABD expects to post revenues of ₹2,400 crore during the current fiscal, which is about 34 per cent more than the previous year.
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