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

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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