Varun Beverages to raise US$891.9M via QIP to fuel expansion, strategic growth
INDIA – Varun Beverages (VBL), PepsiCo’s largest bottler in India, has announced plans to raise Rs 7,500 crore (US$891.9M) through Qualified Institutional Placement (QIP) to support its ambitious growth strategies.
The company’s board approved the proposal in a meeting, with the fund-raising set to be carried out in multiple tranches, subject to shareholder approval via a postal ballot, according to a regulatory filing.
VBL intends to use the raised capital to invest in its subsidiaries or joint ventures, expand its operations geographically, support new product development (NPD), and pursue strategic acquisitions.
Additionally, the funds will also be allocated toward debt pre-payment or repayment and other general corporate purposes.
The company’s financial performance in 2023 has been robust, with net revenues soaring by 21.8 percent to Rs 16,042.58 crore (US$1.9B).
For the June quarter alone, VBL reported revenue growth of 28.3 percent, reaching Rs 7,196.86 crore (US$855.9M), while profits surged by 25.5 percent to Rs 1,261.83 crore (US150.1M).
VBL, which handles 90 percent of PepsiCo’s beverage sales volume in India, is rapidly expanding its global footprint.
Among its current capital projects is a US$50 million investment in a new Pepsi cola production facility in the Democratic Republic of the Congo.
The facility will be located in Kiswishi, a special economic zone near the city of Lubumbashi in the southwestern region of the country.
Varun Beverages, a long-time franchisee for PepsiCo’s soft drinks brands such as Mountain Dew, Mirinda, and 7-Up, has been operating in Africa since 2007.
The company has established facilities in Morocco, Mozambique, Zambia, and Zimbabwe.
In December, VBL expanded its presence in Africa by acquiring The Beverage Company (Bevco), a South African PepsiCo bottler.
Bevco holds franchise rights for PepsiCo’s products in South Africa, Lesotho, and Eswatini, with additional distribution rights for Namibia and Botswana.
The group operates five manufacturing facilities in South Africa, located in Johannesburg, Durban, East London, and Cape Town.
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