Sula Vineyards set for IPO launch on December 12

India's largest wine maker Sula Vineyards is all set to launch its initial public offering between Dec 12-14, multiple industry sources with knowledge of the matter told Moneycontrol.

Sula Vineyards is considered a "category creator" and once the listing plans fructify, it would arguably be the first IPO in India by a pure play wine manufacturer.

"The issue will open for anchor investors on Dec 9 and will be open for the public from Dec 12 to Dec 14," said one of the persons above.

"Sula Vineyards is looking to raise around Rs 950 crs to Rs 1000 crs via the IPO which consists solely of an OFS component," a second person told Moneycontrol.

Both the persons above spoke to Moneycontrol on the condition of anonymity. Moneycontrol could not elicit an immediate comment from Sula Vineyards.

To be sure, according to the DRHP of Sula Vineyards which was filed in July, the size of the offer for sale component is up to 25,546,186 equity shares.

Sula Vineyards is backed by consumer focused Belgian family office Verlinvest, which made its first investment more than a decade back and is poised to participate in the OFS. Rajeev Samant is the MD & CEO of the company.

CLSA, Kotak Mahindra Capital and IIFL Capital are the i-banks working on the issue. Law firms Shardul Amarchand Mangaldas and Trilegal are the legal advisors, according to the DRHP.

To be sure, Fratelli and Grover Zampa are two of the domestic unlisted peers of Sula Vineyards.

Officers Choice whiskey maker Allied Blenders & Distillers is another alcohol firm which filed its DRHP (draft red herring prospectus) with Sebi earlier this year and is planning a launch within the next few months.

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.