Sula Vineyards shares fall 4% amid block deal buzz

Shares of Sula Vineyards declined over 4% in opening trade on Thursday, driven by a surge in volume trade amid block deal buzz. Verlinvest Asia Pte was reportedly looking to sell up to a 12.56% stake in India's leading winemaker via a block deal. However, the names of sellers and buyers were not ascertained immediately.

Verlinvest Asia Pte, an investment company that invests in digital and e-commerce, food, beverages, and health and care sectors, is expected to raise around ₹539.2 crore by selling shares at floor price at a price in the range of ₹473-508.7 apiece. The floor price has been fixed at a 0 to 7% discount to the Sula's closing price of ₹508.70 on the BSE on August 30.

As per the exchange data, Verlinvest Asia Pte held 20.91% shareholding in the winery and vineyard company at the end of June 2023 quarter.

Driven by volume trade, Sula Vineyards share price declined as much as 4.4% to ₹486.10, with 1 lakh shares changing hands over the counter compared to two-week average volume of 0.82 lakh stocks. The market capitalisation slipped to ₹4,154 crore.

Sula Vineyards shares touched a 52-week high of ₹534.70 on August 1, 2023, while it hit a 52-week low of ₹305.55 on December 26, 2022. The smallcap stock has risen 48% in a year and 49% in the calendar year 2023.  In the last six months, the counter gained 40%, while it dropped nearly 6% in a month.

The Nashik-based company, which made its debut on stock exchanges on December 22, 2022, trades 36% higher than its IPO price of ₹357 apiece.

On August 17, the owner of the Dindori and Rasa wine brands released a business update, saying that its iconic Wine Tourism operations achieved a record-breaking long weekend as visitor attendance surged at the Nashik and Bengaluru wine tourism facilities on August 12-14. Sula’s wine tourism is an integral pillar of the business with thousands of potential wine drinkers tasting their first glass of wine at the Tasting Room terrace at the company’s original, historic Nashik facility.

As per the company, revenues over the three days touched ₹2.08 crore, 40% higher than the previous three-day record of ₹1.47 crore. Both August 13 and 14 crossed the previous single day revenue record of ₹70 lakh set on August 14, 2022, with August 13 setting a new record of ₹82 lakh.

“Sula’s wine tourism visitors, revenues and tastings are second to no other in the world today. I look back at when we opened the first winery tasting room in India in 2005, when we were happy to welcome even 10 visitors a day, and I marvel at just how far we have come. It is very exciting indeed! I want to specially thank the state governments of Maharashtra and Karnataka who have been very proactive in encouraging wine tourism,” said Rajeev Samant, CEO of Sula.

“A record 11,670 visitors enjoyed a day at Sula over the three days, a massive jump from the previous record of 8,532 visitors in the year-ago period. August 14 saw the highest ever single day footfall with 3711 visitors, erasing the previous record of 3471 set on the same date in 2022,” Sula Vineyards said in the exchange filing.

In Q1 FY24, Sula Vineyards reported a 24.4% growth in net profit at ₹13.68 crore compared with ₹11 crore a year ago. The revenue from operations rose 21% to ₹117 crore, with its Own Brands segment, comprising premium wine brands, accounting for about 89% of the income. The revenue from wine tourism grew 11% to ₹11.4 crore, aided by a 70% jump in visitors at its winery located outside the city of Bengaluru.

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