Coca-Cola, Bhartia family may list Hindustan Coca-Cola Beverages in India: Report

Coca-Cola’s stake in the bottling company is expected to drop below the majority level over the next five years

The Coca-Cola Company and its Indian partner, the Bhartia family, may look at listing Hindustan Coca-Cola Beverages (HCCB) in India, according to a report by Business Standard citing sources aware of the discussions.

As part of this plan, Coca-Cola’s stake in the bottling company is expected to drop below the majority level over the next five years, the report added.

A source told Business Standard that the Bhartia family will become the “reference and controlling shareholder” in the business.

“They (the family) are not a passive financial investor or a passive strategic investor and that’s not what Coca-Cola was looking for here,” the source told Business Standard.

On a potential IPO of HCCB, the source added: “There’s been no explicit, if you like, confirmation of an IPO, but that’s a possibility.”

In December 2023, the Bhartia family’s Jubilant Group, through Jubilant Beverages, announced the acquisition of a 40 percent stake in Hindustan Coca-Cola Holdings, the parent entity of the bottling company, at a valuation of Rs 12,000 crore, Business Standard reported.

Although Coca-Cola remains the majority shareholder as of now, the Atlanta-based beverage major is pursuing a global strategy to refranchise its bottling operations, aligning with its asset-light business model.

“We started the process of reaching out to a number of Indian families, partners that we thought would be fit as purpose partners in late 2023 and we conducted a competitive process. In September last year, we entered into an exclusive dialogue with the Bhartia family and that led to the signing of the transaction,” said Akeel Sachak, Partner and Global Head of Consumer at Rothschild & Co, at a round table, as quoted by Business Standard.

Sachak added that the Bhartia family’s track record as a successful franchisee for Domino’s distinguished them from other contenders.

Commenting on the broader consumer space, Subhakanta Bal, Managing Director of Rothschild & Co India, told Business Standard that several large Indian industrial houses are actively investing in new-age and sunrise sectors.

“The recent paints transaction (JSW acquired AkzoNobel’s India business), or some of the largest families that have deployed significant capital in essentially what are new sectors or sunrise sectors (are pointers to that),” Bal said.