Amit Dahanukar, Chairman of Tilaknagar Industries, is unfazed by the decision of rival Allied Blenders and Distillers (ABD) to purchase 50 per cent ownership rights in two liquor brands—Mansion House and Savoy Club—from Herman Jansen Beverages Nederland BV.
The deal marks a new turn in ABD’s attempts to acquire a majority stake in Tilaknagar, which is currently making the Mansion House and Savoy Club brands in the country.
Since mid-2013, Kishore Chhabria-led ABD and Tilaknagar were said to be in discussion to form a $1-billion combined entity. With ABD keen on a majority buyout, negotiations had got stuck. High valuation was also cited as a major hurdle.
Dahanukar, however, told
“We are not interested in selling outright. We would be open to infusion of capital, either from private equity players or a strategic partner. As of now, we are looking to inject up to ₹150 crore this fiscal,” he said.
Asked about ABD’s eagerness to acquire a majority stake in Tilaknagar, Dahanukar said: “I would not like to comment on market speculation.” He added ABD had teamed up with Dutch firm Herman Jansen despite that latter’s seven-year-old court case with Tilaknagar.
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Regarding ABD’s acquisition of part-ownership in Mansion House and Savoy Club, Dahanukar said the assignment of the brands is “illegal” as judicial proceedings are still pending. “Neither Herman Jansen nor ABD are entitled to use the trademarks, Mansion House and Savoy Club, as they would be tantamount to violation of Tilaknagar’s rights in the trademarks.”
Tilaknagar’s rights in the Mansion House and Savoy Club brands were recently upheld by the Bombay High Court.
Not bailing outDahanukar, who holds a Masters degree in Engineering Management from the Stanford University, US, is the fourth generation handling the family business, which was established in 1933 as Maharashtra Sugar Mills. “My great grandfather started this company, which transitioned to the liquor business in 1987. The sugar mill assets were divested the same year,” he said.
He and his wife, Shivani Amit Dahanukar, have been at the helm for the last 10 years. “We see a lot of potential in this company. There is a lot of value to be created, and we are not going to sell out,” said the Chairman.
Deciding to go it alone is, however, not an option for Tilaknagar, which has been looking to pare some of its ₹700-crore debt.
Tilaknagar, which has a strong brandy and rum portfolio, has been seeking a larger footprint in the whisky market. “Whisky has a pan-India presence, and the North and West are huge markets, which we are unable to address because of our portfolio. We are looking to bring in a partner to grow our whisky reach,” said Dahanukar.
The company had shelled out around ₹25 crore to acquire the Indian-made foreign liquor business of Kolkata-based IFB Agro. The acquisition was completed in December 2013.
Stating that infusion of capital would help “consolidate and strengthen our balance sheet and pare debt”, Dahanukar said the company was currently tackling it “with internal cash generation and accruals. We are strong in brandy and rum. With the IFB buy, we have grown stronger in vodka and gin. We are complete in ‘whites’, now we need whisky in order to make the whole.”
The Chairman added South India is a brandy and rum market, but since 60 per cent of the Indian market caters to whisky, “our long-term strategy needs to involve a big whisky brand”.