Sula Vineyards makes a flat debut on bourses, lists at Rs 361

Sula Vineyards: Sula Vineyards to debut on December 22. India's largest wine producer will make its debut on the bourses on December 22. The issue price has been fixed at Rs 357 per share.

India's largest wine producer Sula Vineyards made a flat stock market debut on December 22, listing at only 1 percent gain to its issue price of Rs 357 apiece.

On the NSE, it started trading at Rs 361, higher by 1.12 percent. On the BSE, it started trading at Rs 358.

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The initial public offering of Sula Vineyards was subscribed 2.33 times during December 12-14, 2022 with every category getting full subscription, but overall it was lower than analysts' expectations.

The public issue was a complete offer-for-sale, which means the company did not receive any proceeds from the offer and the money went to the selling shareholders.

"Lower promoter holdings are cause for alarm. Investors with cash surpluses might think about investing for a long-term reward," said Manoj Dalmia Founder and Director, Proficient Equities.

As of September quarter end, Sula Vineyards had outstanding borrowings of Rs 231.5 crore and cash and cash equivalents of Rs 13 crore.

Over the last five years, Sula’s financial performance has been inconsistent. For the year ended March 2018, it reported net profit of Rs 12.3 crore. Next year, net profit was Rs 7.2 crore followed by a loss of Rs 16 crore. For the year ended March 2021, which was the Covid-hit year, net profit was Rs 3 crore. And the year after that, right before the IPO, net profit jumped to Rs 52 crore.

"If we look at its financial track record the issue is fully priced-in and discounts all near-term growth," according to Prashanth Tapse, Senior VP Research at Mehta Equities.

Also Read: Will Sula Vineyards leave investors in high spirits or high and dry?

The entire alco-beverage consumption market in India stands at 987 million cases. Of this, 30 percent is beer, 69.3 percent spirits and only 0.7 percent is wine.

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