Why Indri single malt maker Piccadilly Agro is opening new distilleries in Scotland, Chhattisgarh

Siddhartha Sharma (right), promoter of Piccadily Agro Industries Ltd, which makes Indian whiskeys like Indri, Whistler and Royal Highland, as well as Camikara rum. (Image courtesy Piccadily Agro)

Incorporated in 1994 and listed in 1997, Haryana-headquartered Piccadilly Agro Industries Ltd launched its flagship single malt Indri in 2022. In November 2024, the maker of Indri whisky and Camikara rum announced it had raised Rs 312 crore to begin a Rs 1,000-crore expansion which includes a greenfield project in Chhattisgarh and a new distillery in Scotland. The company hopes to make 30 kilo litres per day (KLPD) of single malt (up from 12 KLPD), and 220 KLPD of extra neutral alcohol (ENA) and ethanol at the expanded distillery as well as set up new distilleries at Mahasamund in Chhattisgarh and Portavadie in Scotland. In a phone interview, Piccadily promoter Siddhartha Sharma spoke about the fund raise, and how the company plans to use it. Edited excerpts:

You've raised money from marquee investors and promoters. Can you talk us through the thinking on that?

Initially, we decided to do a Rs 1,000-crore fund raise in the company, which was planned about two-and-a-half to three years ago. We divided that into two parts: 50 percent to be equity infusion and 50 percent to be from our internal accruals and debt. Out of that Rs 1,000 crore, we shored up that part because we are doing a new project, a greenfield in Chhattisgarh. That we got funded from the bank and from internal accruals; that is a Rs 250 crore project so that was kind of settled there.

Along with that we also spoke to the bank regarding working capital requirements going forward, because we are going to make much more malt, and malt is something which we will have to store over years and investment in barrels and warehousing. So for that also, the bank said we don't have a problem raising working capital for those requirements.

Other than that, we wanted to set up a distillery in Scotland, increase our capacity within Indri, make warehouses here. For that we had the first phase of our fundraise and we were quite lucky that we got marquee investors coming in, 21 in all, who invested in the company at a very good valuation. Of course, Rs 50 crore in the first phase was invested by the promoters as well because we did not want our equity to be diluted too much.

You're one of the few listed companies that make malt in the country. Would you say it's easier or harder for a listed company to raise funds for an expansion like this?

I think it's easier because the listed route is very regimented. You know what's going to happen and there are rules in place - the price of your share and how you'll raise it (the money) is fixed by the SEBI regulations. So it's more regimented, it's already laid out, whereas people who are not listed, when they go to venture capitalists, there may be terms and conditions which are not per se the best for a company. We've seen in the past, a few companies suffer that fate. Here it's on the stock exchange it's done through them, so everything is above board, and there will be no underlying conditions for that investment, so to say.

You've been based out of Haryana so far. Why open a new distillery in Chhattisgarh now?

Geographically India is very huge and diverse. As a first phase (of expanding out of Haryana), Chhattisgarh was a natural extension because that region has very few distilleries and the regulation and excise is quite... it's more open, transparent and regimented than most of the southern states, where, you know, as the governments change, the policies change quite dramatically there. So we thought that states which are stable is where we should extend our business because naturally you can only go up to a certain amount of business in a certain state. So Chhattisgarh was a natural progression. Also, that's one of the bowls where rice and corn is grown in abundance. So raw material availability is also something that guided us there.

You mentioned it's a Rs 250-crore project. What are you going to be making there?

It's an ENA/ethanol - so conventional distillery with IMFL country liquor brands like a distillery which is your bread and butter along with a 30-kilo litre malt plant that we want to put up there. So it will have both the single malt as well as the IMFL and the ENA and ethanol like Indri does. So it's just exactly like what we do in Indri (in Haryana), it's just going to be a complete setup again there.

So will you be making different brands across Haryana and Chhattisgarh or will all the brands be made across the board?

So, the single malt cannot be made across the board. Indri will be made only in Indri and Chhattisgarh, once the malt plant comes up, will definitely have another single malt brand coming out of there.

So, are you looking at a new brand launch as well?

Not immediately. Single malt, once the plant goes up, there's a minimum three-year maturation period, only after that. It'll be too early to launch a brand in that space right now.

But you have something in development right now?

Yes, we do.

Can you tell us about it?

I think it will be a cat out of the bag too soon. But we anyway have other single malts in our portfolio... there's lots of possibilities.

Piccadily Distillery, Indri. (Image courtesy Piccadily Agro Industries)

And you're also going into Scotland?

The vision for Piccadilly is not purely local. Most of the alcohol companies, their focus and vision is within the country. Nobody's ever thought of breaking that glass ceiling and trying to become a global player in the alcobev space. We feel that the way India is growing, and the Indian diaspora has got disposable income all over the world and they are definitely champions of Indian products now, so Piccadilly's journey going forward, the intent is to be an alcohol beverage brand globally not just domestically. So that is the first step where we will enter the Scotland space. Going forward there may be more places that we look at as well.

And all of these expansions really are towards your ethanol and your single malt production, not towards the other spirits?

Ethanol is a by-product. Essentially when we make ENA almost 15-20 percent of that is not usable because it's not the best quality of alcohol for human consumption. So that is usually dehydrated to make ethanol. And the rest of it is used for your IMFL brand. But then coming to the malt space, you can't use this product at all in your malt - not even a drop of ENA or any of this in your malt. Malt has to be done in a completely different setup in a different way.

Indri Trini

You have a rum brand as well, and the question I was coming to was, that Indian whiskeys seem to have established themselves abroad as well as in the domestic market, but some of the other spirits seem to be struggling a little bit - be it gin or rum. Is that also your understanding?

Not struggling, I would say. I think they are in their infancy. For example, a cane juice rum in India making. Everywhere you hear India's the largest producer of sugarcane, largest producer of bagasse in the world, and we don't have a good rum to our name. We (in India) make a rum today out of ENA which is made from grain which is technically not a rum. Rum is made from sugarcane or its derivatives: sugarcane, jaggery or molasses; you have to have that base to call it a rum. If it's a cereal, then you can call it a blended whiskey but you have to mature it. Those nomenclatures are not quite defined in India so everybody's kind of taken that advantage.

But with people's education going up, with the know-how, and social media being so prominent, and information being exchanged so easily, I think in the coming years, people will understand what they are drinking more clearly. So we are working on a quality emphasis with our products, where we do not want to compromise on quality in the long term. And say on our label what we are serving them, like we are doing a Camikara three-year-old, so the three-year-old is matured for three years in oak barrels, the minimum age is three years. Otherwise, you don't need to give an age statement in a rum. So I think people will understand that slowly maybe for new products, but surely as what I feel.

And what is the split of your domestic market versus international market, what accounts for most of your sales?

As we stand, we are about a 70-30 odd. I might be off by 1 or 2% there, but about a 70-30 split is where we are. 30% exports and 70% domestically.

And what are your biggest export markets?

My biggest export market is the US right now.