Officer's Choice whisky maker Allied Blenders and Distillers Ltd. has filed preliminary papers with capital markets regulator SEBI (Securities and Exchange Board of India) to raise ₹2,000 crore through an initial public offering (IPO). The Allied Blenders and Distillers IPO comprises equity shares worth ₹1,000 crore and an offer for sale (OFS) worth ₹1,000 crore by the promoter and the entity.
According to the draft red herring prospectus (DRHP), the company will use the net proceeds towards prepayment or scheduled repayment of a portion of certain outstanding borrowings of the company, and general corporate purposes. Each of the selling shareholders will be entitled to the proceeds of the offer for sale after deducting their respective portion-related expenses and relevant taxes.
The company will not receive any proceeds from the OFS and the proceeds will also not form part of the net proceeds. Bina Kishore Chhabria, Resham Chhabria, Jeetendra Hemdev and Neesha Kishore Chhabria are part of the promoters group of the company.
When it comes to its financials, Allied Blenders and Distillers' total outstanding borrowings stand at ₹926.8 crore as of December 31, 2021. "The company will use ₹708.9 crore from the net proceeds towards prepayment or scheduled repayment of all, or a portion, of the principal amount on certain loans," says the DRHP.
The company's net cash generated from operating activities was ₹191.1 crore, ₹594.5 crore, ₹246.6 crore, ₹95.4 crore in fiscal 2019, 2020 and 2021 and in the nine months ended December 31, 2021, respectively. As of the December quarter of FY22, its net worth was ₹406.1 crore. In the nine months ended December 31, 2021, the company sold 20.66 million cases of Indian-made foreign liquor in India. It possessed an overall market share of 8.2% in the Indian-made foreign liquor market by sales volumes in fiscal 2021, says the DRHP.
Allied Blenders and Distillers is one of the only four spirits companies in India, with a pan-India sales and distribution footprint. Its product portfolio comprises 10 major brands of Indian-made foreign liquor across whisky, brandy, rum and vodka.
The company is a leading exporter of Indian-made foreign liquor (IMFL) in terms of annual sales volumes between fiscal 2019 to fiscal 2021, with an estimated peak share of 20% in fiscal 2021. A Technopak report says that Allied Blenders and Distillers's Officer’s Choice Whisky is among the top-selling whisky brands globally, in terms of annual sales volumes between the calendar years 2016 and 2019.
Shekhar Ramamurthy, executive deputy chairman at ABD, while speaking to Fortune India says one thing about the alcohol business is that there's growth in this (alcohol) business. "During Covid, there was a decline like in every other space, and spirits business declined about 12-13%. After one year of Covid, it has grown back to the level it was pre-Covid. We hope to see growth going forward. Also, at the more micro level, socio and economic indicators are all positive."
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