Ravi Jaipuria, Chairman, Varun Beverages said the funds raised from the IPO will be more used for reducing debt than spending on expansion.
Varun Beverages is planning to raise between USD 165 million and USD 167 million with its initial public offering (IPO) between October 26-28. It has set a price range of Rs 440-445 per share.
The company currently has a debt of Rs 2,300 crore which they plan to bring down to Rs 1600 crore post the IPO, said Jaipuria in an interview to CNBC-TV18. Expansions keep happening on a regular basis which is funded through internal accruals, he said.
The company has been one of the biggest bottlers for Pepsi in India and have had a healthy working relationship with them for a long time now, said Jaipuria. So, he is not worried about an extension of their contract, which ends in 2021. The contract gets automatically renewed every 10 years since 1991, he said.