India’s largest wine producer Sula Vineyards launches US$116m IPO

INDIA – Sula Vineyards Ltd, India’s largest winemaker, has set the price band for its initial public offering (IPO) at Rs 340-357 (US$4.13- 4.37) a share, which will open for subscription on December 12.

The three-day initial share sale will conclude on December 14 and the bidding for anchor investors will open on December 9, the company said in a statement.

Incorporated in 2003, Sula Vineyards is India’s largest wine producer and seller, as of March 31, 2021. Its flagship brand, ‘Sula’, is the ‘category creator’ of wine in India.

The company channels its bouquet of popular brands including RASA, Dindori, The source, Satori, Madera, and Dia, among others, to over 47 distributors, 10 corporations, 23 licensed resellers, 7 company depots, 4 defense units, and over 23,000 points of sale as of March 31, 2022

Currently, the company produces 56 different labels of wine at four owned and two leased production facilities located in the Indian states of Maharashtra and Karnataka.

It is reported that If Sula Vineyards lists as per plans, the company would be India’s first pure-play wine manufacturer to make a debut on Dalal Street.

At the upper end of the price band, the IPO is expected to fetch ₹ 960.35 crores, a slash from the Rs 1,200-1,400 crore it was eyeing.

According to the company’s DRHP, the issue is entirely an offer for sale (OFS) by the promoters and existing shareholders of the company, who will offload about 2.56 crore equity shares from their kitty.

They include founder and CEO Rajeev Samant, and investors such as Cofintra, Haystack Investments Limited, Saama Capital III, Ltd, SWIP Holdings Limited, Verlinvest S.A, and Verlinvest France S.A.

The public issue will be entirely an offer for sale (OFS) aggregating to 26,900,532 equity shares by the promoter, investors, and other shareholders. Investors can bid for a minimum of 42 equity shares and in multiples thereafter.

Kotak Mahindra Capital Company, CLSA India, and IIFL Securities are the book-running managers of the company, whereas KFin Technologies has been appointed as the registrar of the issue.

The Nashik-based wine maker’s profit after tax increased multi-fold to ₹ 30.51 crores (US$3.7m) for the six months that ended on September 30, 2022, from ₹ 4.53 crore (US$550,607) a year earlier.

Its revenue from operations surged by 40.8 percent to ₹ 224.07 crores (US$27.3m) for the six months ended September 30, 2022, from ₹ 159.15 crores (US$19.3m) registered in the same period of the preceding fiscal.

Sula has also been receiving backing from various private equity funds and institutional investors, including Verlinvest, Everstone Capital, Visvires, Saama Capital, and DSG Consumer Partners.

Belgium-based Verlinvest, which has been an investor in Sula since 2010, put over US$70 million into the company via multiple fundraising rounds.

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