The board of Tilaknagar Industries, the maker of Mansion House, India's largest selling brandy and the second largest selling brandy globally, will meet on July 23, to consider a proposal for raising of funds even as the alcohol industry keenly awaits the outcome of a hotly-contested M&A process in the sector.
On July 7, Moneycontrol was the first to report that Tilaknagar Industries had edged ahead of other suitors and entered exclusive negotiations for the proposed buyout of Imperial Blue whiskey, owned by French liquor giant Pernod Ricard.
The report had added if the negotiations proceed as planned, a final agreement could be signed between both the parties later this month. "Tilaknagar Industries is planning to fund the proposed deal via a combination of debt and equity," the report added further.
According to the board meeting disclosure by Tilaknagar Industries, the fund raise will be carried out via issuance of shares, debentures, warrants, preference shares, bonds, or other instruments, and may be done in one or more tranches through the permitted routes such as a public offer, rights issue, private placement, preferential allotment, Qualified Institutional Placement (QIP), or a combination of these.
The liquor firm also announced a key legal victory recently in a trademark case.
"We would like to further inform that the Company (TI) has successfully established its proprietary rights in the trademarks MANSION HOUSE & SAVOY CLUB and the Company’s rights to continue the usage of the concerned trademarks as had been upheld in the order passed on 22nd December 2011 by the Single Bench of Bombay High Court has now been upheld by the Division Bench of Bombay High Court, which has deemed it fit to dismiss the appeal filed by UTO Nederland B V (UTO)/ Herman Jansen B V, against the said order.
The announcement added, "The Division Bench has deemed it fit to also order that until the final order in the suit, UTO (Herman Jansen B V) and Allied Blenders and Distillers Ltd. will not launch the brands MANSION HOUSE & SAVOY CLUB in India."
The share price of Tilaknagar Industries has risen by more than 22 percent in the past five trading sessions, including nearly 8 percent surge on July 22. The last mega acquisition in the Indian liquor segment was Diageo's acquisition of United Spirits for around $1.9 bn back in 2014.
On December 17, Moneycontrol was also the first to report that Tilaknagar Industries and Inbrew Beverages were gearing up to enter the final round for the sale of Imperial Blue whiskey.
Goldman Sachs is acting as the sell-side advisor on the deal, the December 17 report had said, also adding that Tilaknagar Industries is keen on expanding in the whiskey segment. Mansion House Gold Barrel whiskey, Blue Lagoon gin, Madira Gold Dark XXX rum also form part of the Tilaknagar Industries portfolio.
Serial entrepreneur Ravi Deol backs Inbrew Beverages which is behind Bagpiper Whiskey and White Mischief Vodka. The Economic Times reported last month that Japanese multinational Suntory had also revived interest in the ongoing sale process. In May 2022, aimed at focusing on brands like Johnnie Walker whiskey, Pernod Ricard's global rival Diageo's arm United Spirits sold 32 brands like Haywards, Old Tavern and Green Label to Inbrew Beverages for $106 million.
Through the Imperial Blue sale process, Pernod Ricard can focus on higher-margin, premium whiskey brands like Chivas Regal, Glenlivet and Jameson. Since Imperial Blue became part of Pernod Ricard in 2002, "its success has grown year on year, and today it is the group’s largest brand by volume", as per the firm's website. Imperial Blue was launched in India in 1997. It is Pernod Ricard's second best-selling Indian whisky, behind Royal Stag, having sold 22.8 million nine-litre cases in 2023 according to the Drinks International Millionaires’ Club.
During the Q2FY25 earnings call, Ameya Deshpande, President ( Strategy and Corporate), Tilaknagar Industries said, "Our vision 2030 would be more like an 80:20 saliency whereby 80 per cent of our business is still driven by brandy, but non-brandy kind of expands to 20 per cent from the current 6 per cent."
In the past, Tilaknagar Industries has made investments in the alco-bev segment, including ready-to-pour -beverage company Bartisans and Spaceman Spirits which owns Samsara Gin. The firm's consolidated net profit rose sharply by 55.7 percent to Rs 40.09 crore in Q1FY25 as against 25.75 crore posted in Q1FY24.
In other deals in the liquor sector, Nikhil Kamath revealed he had a small minority stake in Magic Moments Vodka and 8 PM whiskey maker Radico Khaitan earlier in the year. Japan's Kirin Holdings invested $25 millon and increased its stake in B9 beverages, the maker of Bira 91 and owner of the Beer Cafe chain.
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