Allied Blenders files draft papers with Sebi for Rs 2,000 crore IPO

Allied Blenders and Distillers, India's third-largest Indian-owned Indian-made foreign liquor (IMFL) company, has filed draft papers with Sebi for a Rs 2,000 crore initial public offer.

The Mumbai-based company, peers to United Spirits, Pernod Ricard India and Radico Khaitan, is looking to raise up to Rs 1,000 crore and an offer-for-sale (OFS) of Rs 1,000 crore by promoter and selling shareholders. This includes selling by Bina Kishore Chhabria of up to Rs 500 crore stake, up to Rs 250 crore by Resham Chhabria Jeetendra Hemdev and up to Rs 250 crore by Neesha Kishore Chhabria.

The company, in consultation with the lead bankers to the issue, may consider a preferential issue of equity shares or any other method aggregating up to Rs 200 crore. If such placement is completed, the fresh issue size will be reduced.

The offer will be made through the book-building process, wherein not more than 50 per cent would be available for allocation to qualified institutional buyers, not less than 15 per cent to non-institutional bidders and not less than 35 per cent to retail individual bidders. The offer also includes a reservation for subscription by eligible employees.

The company intends to utilise the proceeds from its fresh issuance worth Rs 708.98 crore for prepayment or scheduled repayment of a portion of certain outstanding borrowings and balance for general corporate purposes.

Allied Blenders and Distillers is one of the only four spirits companies in India with a Pan-India sales and distribution footprint, and was a leading exporter of IMFL, in terms of annual sales volumes between FY2019 to FY2021 with an estimated peak share of 20 per cent in FY21.

From 2016 to 2019, Officer’s Choice Whisky was among the top-selling whisky brands globally in terms of annual sales volumes. Over the years, ABD has expanded and introduced products across various categories and segments.

As of March 31, 2022, their product portfolio comprised 10 major brands of IMFL across whisky, brandy, rum, and vodka.

According to a Technopak report quoted in its DRHP, ABDs brands which include Officer’s Choice Whisky, Sterling Reserve, and Officer’s Choice Blue, are ‘Millionaire Brands’ or brands that have sold over a million 9-litre cases in one year.

Apart from liquor, the company also sells packaged drinking water under the Officer’s Choice, Officer’s Choice Blue, and Sterling Reserve brands and has exported its products to 22 countries internationally, including countries in North and South America, Africa, Asia, and Europe.

Distribution of alco-beverages is highly controlled by the state government- both at the wholesale and retail level. There is a high entry barrier for new players. Allied Blenders' sales and distribution footprint spans across 25 states and union territories. Its products are retailed across 64,000 outlets as stated in the DRHP.

Allied Blenders and Distillers’ revenue from operations stood at Rs 6378.78 crore for FY21, and profit after tax at Rs 2.51 crore. For nine-month ending December 2021, revenue from operations stood at Rs 5444.98 crore and profit after tax at Rs 3.30 crore.

ICICI Securities, Axis Capital, JM Financial, Kotak Mahindra Capital Company and Equirus Capital are the book-running lead managers and Link Intime India Private Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.