Sula Vineyards, based in the grape growing region of Nashik, Maharashtra is planning a pure OFS
India’s largest wine maker Sula Vineyards has filed papers with market regulator Securities and Exchange Board of India (Sebi) to raise capital through an initial public offering ( IPO), multiple industry sources with knowledge of the matter told Moneycontrol.
If the listing plans fructify , it would arguably be the first IPO in India by a pure play wine manufacturer and the second filing in recent weeks by a player from the alcohol & spirits segment. Officers Choice whiskey maker Allied Blenders & Distillers filed its DRHP (draft red herring prospectus) last month.
Sula Vineyards, based in the grape growing region of Nashik, Maharashtra is planning a pure OFS ( offer for sale). The firm is backed by key shareholder consumer focused Belgian family office Verlinvest, which made its first investment more than a decade back. Rajeev Samant is the MD & CEO of the company.
“The e-filing of the DRHP with Sebi has been done. The IPO consists consists solely of an OFS component, as part of which Verlinvest and the promoter group are amongst the major selling shareholders,” said one of the persons above. He added that aaccording to the DRHP, the size of the offer for sale component is up to 25,546,186 equity shares.
A second person confirmed the filing and said that Sula Vineyards is profitable and was pretty much a “ category creator ” in the segment. It has seen a surge in sales in recent quarters with proceeds also coming from the luxury tourism vertical, this person elaborated.
“ Kotak Mahindra Capital, CLSA and IIFL Capital are the i-banks working on the issue, “ added a third person. Law firms Shardul Amarchand Mangaldas and Trilegal are the legal advisors, he said.
All the three persons above spoke to Moneycontrol on the condition of anonymity.
Sula Vineyards declined to comment in response to an email query from Moneycontrol. Moneycontrol is awaiting responses from Verlinvest, Kotak Mahindra Capital, CLSA & IIFL Capital.
To be sure , Fratelli and Grover Zampa are two of the domestic unlisted peers of Sula Vineyards.
A ‘SPIRIT’ED LOOK AT SULA
Sula is headquartered in Nashik, 180 Km northeast of Mumbai, and has two manufacturing units, one located in Nashik and the other one in Bengaluru. As of January, it had a production capacity of over 13 million litres, of which 11 million litres is housed in Nashik and 2 million litres is housed in Karnataka.
The firm has a dominant market share in the domestic wine industry, driven by a varied vast portfolio of wine brands across different price categories and an expansive distribution network. It produces about 56 domestic labels under 13 brands which are classified into Elite, Premium, Economy and Popular segments based on their price, composition, taste and other properties such as alcohol content. Going forward under the premiumisation strategy, increasing contribution from the Elite and Premium segments is expected to support the company’s revenues and margins over the longer term, according to a January 2022 report by rating agency ICRA.
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 at Sula. Further, it has dealership agreements with international brands such as Le Grand Noir, Hardys, Beluga Vodka etc., to distribute imported wine and other core spirits in India. This enables the company to expand its sales distribution network by providing a package of Sula wines, other international branded wines and core spirits to its distributors, the ICRA report added.
The company which derives more than 50 per cent of its revenues from the wine segment from Maharshtra and Karnataka, operates in a highly regulated industry which has state-specific policies and has also seen the entry of international players.
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