Nashik-based Sula Vineyards has filed documents with market regulator Securities and Exchange Board of India (Sebi) to raise capital through an initial public offering (IPO).
The company plans a pure OFS (offer for sale) and is backed by Verlinvest, a Belgian consumer-focused family office, which made its first investment more than a decade ago. Rajeev Samant is the managing director and CEO of the company, Moneycontrol said citing multiple sources.
“The electronic filing of the DRHP with the Sebi has been made. The IPO consists only of an OFS component, in which Verlinvest and the promoter group are among the main selling shareholders,” said the Moneycontrol report quoting one of the people close to the company. According to the DRHP, the size of the component offered for sale amounts to 25,546,186 shares, added the same source.
Sula Vineyards is synonymous with Indian wines and is considered a “category builder” in the segment. It has seen an increase in sales in recent quarters, with revenue also coming from the luxury tourism vertical, according to people knowledgeable.
“Kotak Mahindra Capital, CLSA and IIFL Capital are the investment banks working on the issue,” added a third person. Shardul Amarchand Mangaldas and Trilegal law firms are the legal advisers, he said.
Sula Vineyards declined to comment in response to an email query and responses from Verlinvest, Kotak Mahindra Capital, CLSA and IIFL Capital are awaited, according to the report.
Sula is headquartered in Nashik, 180 km northeast of Mumbai, and has two manufacturing units, one in Nashik and the other in Bengaluru. As of January, it had a production capacity of over 13 million liters, of which 11 million liters are hosted in Nashik and 2 million liters in Karnataka.
The company holds a dominant market share in the domestic wine industry, thanks to a wide and varied portfolio of wine brands in different price categories and an extensive distribution network.
Sula produces around 56 national labels under 13 brands which are categorized into Elite, Premium, Economy and Popular segments based on their price, composition, taste and other properties such as alcohol content. Going forward under the new strategy, the increased contribution from the Elite and Premium segments should support the company’s revenues and margins over the longer term, according to a January 2022 report from the agency. ICRA rating.
In addition to producing and selling wines, the company derives revenue from the hospitality segment through its two wine resorts, Beyond Sula and the Source in Sula. Additionally, it has entered into franchise agreements with international brands such as Le Grand Noir, Hardys, Beluga Vodka, etc., to distribute imported wine and other staple spirits in India. This allows the company to expand its sales distribution network by providing a package of Sula wines, other international brand wines and core spirits to its distributors, the ICRA report added.