India’s No 2 wine producer Grover Zampa Vineyards will invest about ₹200 crore on expansion and acquisitions over the next two years and also increase its sales to 12 million bottles per year in the next three years, according to a senior member of the company.

Grover has been on an acquisition spree over the last two months. Earlier this month, it had acquired Charosa, a winery owned by Hindustan Construction Company.

In January, the company bought ‘Four Seasons Wines’ from United Spirits, a subsidiary of world’s leading liquor company Diageo, and Bengaluru-based Myra Vineyards Grover has spent around ₹100 crore towards these acquisitions.

“The wine industry in India is already due for consolidation as most wineries are not making any profit because of very small scale of operation and due to different tax structures across States,” Ravi Viswanathan, who holds a major stake in the company, told BusinessLine .

A former investment banker, Viswanathan first entered Grover as an investor in 2012 during its merger with Nashik-based Vallee de Vin and subsequently picked up a majority stake in the company. He is also director of VisVires, a Singapore-based private equity fund management company which he promoted with a few others in 2012.

Expansion plans

The ₹200-crore investment, to be raised through internal accruals and bank loans, will be used to acquire more land for grape plantations and to build a new winery in Bengaluru.

The Indian wine industry is currently dominated by Nashik-based Sula Vineyards, which sells about 12 million bottles annually and holds 60 per cent share of the market.

Placed No 2, Grover has sold around 2.5 million bottles during the current financial year and targets to sell about six million bottles between April 2019 and 2020.

“It is not easy. But at the same, it is not impossible also that in 3-4 years, we could be compared to Sula,” Viswanathan said.

Grover is confident of meeting the 12 million bottles target through a slew of acquistions and increasing the plantation area, but trumping the market leader, Sula, which grows by 10-15 per cent annually, is not one of the priorities for Grover.

“Our idea is never to become No 1 in terms of quantity but to retain the pole position as a premium quality wine producer,” Viswanathan added.

He pegged the growth rate of the Indian wine industry at 15-25 per cent (CAGR) for the next 20 years. The company, which currently exports 15 per cent of its production, plans to focus more on the domestic market even post expansion as it projects the local demand to grow exponentially.

“Even before acquisitions, Grover alone exported more than what the entire Indian wine industry put together has exported, and we would retain that position,” Viswanathan added.