It seems investors have got another reason to raise their glasses and toast a cheer, with Allied Blenders and Distillers (ABD) Ltd, set to go live with its upcoming IPO. The Mumbai-based Distilleries company which is known for whiskey brands like Officer’s Choice and Sterling Reserve, had previously filed its DRHP with SEBI in June 2000, but decided to put a halt on the launch of the IPO. The company, then in January 2024, again filed its DRHP finally receiving a nod from the authorities to float the IPO which is estimated to raise approximately Rs 1,500 crores. Let’s check the details about this IPO to help you decide if you should raise your toasts for this IPO or let your glasses stay empty for a while.
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About the company
Established in Mumbai in 1988, Allied Blenders and Distillers (ABD) first gained prominence with its flagship product, Officer’s Choice Whisky, which quickly became a staple in the mass premium segment. By fiscal 2023, Officer’s Choice had captured an impressive 11.8% market share in the Indian whisky market, cementing ABD's status as a leading exporter of Indian Made Foreign Liquor (IMFL).
Diversified Portfolio and Strategic Premiumisation
Over the years, ABD has strategically expanded its product portfolio across various categories and segments. Initially dominant in the popular segment, ABD has now made significant strides into the prestigious and premium categories. This shift towards premiumisation is evident in the launch of brands such as ICONiQ White Whisky, Drishti Whisky, and X&O Barrel Whisky.
The Growing Indian Alcoholic Beverage Market
India ranks as one of the fastest-growing alcoholic beverage markets globally, holding the third position worldwide, just behind China and Russia. Within this dynamic market, Indian Made Foreign Liquor (IMFL) dominates, accounting for approximately 72% of the overall market value in fiscal year 2023.
IPO and Financial Highlights
In a significant move, ABD has received the final observation from the Securities and Exchange Board of India (SEBI) to proceed with its plan to raise ₹1,500 crores through an initial public offering (IPO). The IPO consists of a fresh issue of up to ₹1,000 crores and an offer for sale of up to ₹500 crores by the Promoters and Promoter Group. Notably, the offer for sale includes ₹250 crores by Bina Kishore Chhabria, ₹125 crores by Resham Chhabria Jeetendra Hemdev, and ₹125 crores by Neesha Kishore Chhabria.
Utilization of IPO Proceeds
From the new issuance, ₹720 crores will be allocated for the early repayment of certain outstanding borrowings and for general corporate purposes. Additionally, the company may consider a preferential issue or another approach for a sum of up to ₹200 crores, termed as a "Pre-IPO placement." If finalized, this will reduce the size of the fresh issue.
Management and Listing
ICICI Securities Limited, Nuvama Wealth Management Limited, and ITI Capital Limited are serving as the book-running lead managers for the IPO, with Link Intime India Private Limited acting as the registrar. The equity shares are slated for listing on both the BSE and NSE.
Competition
Allied Blenders and Distillers (ABD) faces competition from major Indian alcoholic beverage companies like United Spirits Limited (USL), Pernod Ricard India, Radico Khaitan, Tilaknagar Industries, Sula Vineyards, Amrut Distilleries, Jagatjit Industries, John Distilleries, Khoday India Limited, and Khemani Distilleries. USL has a significant market share in both premium and mass segments, while Pernod Ricard India dominates in the premium and super-premium segments. Radico Khaitan offers popular brands like Magic Moments Vodka, 8 PM Whisky, and Rampur Indian Single Malt. Tilaknagar Industries offers a diverse product range and strong distribution network. Each company brings unique strengths and brand loyalty, making the market highly competitive.
Financial Performance
ABD's financial performance has been impressive. The company reported a revenue of ₹1,216 crores in FY23, marking a substantial 77.2% year-on-year increase from ₹686 crores in FY22. Profit after tax surged by an astounding 500% to ₹102 crores in FY23 from ₹17 crores in the previous year. As of December 2023, ABD's total debt stood at approximately ₹808 crores.
Market Position and Future Prospects
With a market share exceeding 8% in the IMFL market by sales volumes in Fiscal 2023, ABD continues to strengthen its position. The company's strategic focus on premiumisation, coupled with its robust financial performance, positions it well for future growth.
Upcoming IPOs to watch: Apply and invest in the future!
As it’s seen, Allied Blenders and Distillers is not only a prominent player in the Indian alcoholic beverage market but also a company with a clear vision for the future. As it navigates its IPO and continues to innovate, ABD is set to leave an indelible mark on the industry.
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