Allied Blenders and Distillers, the maker of Officer’s Choice whiskey, is seeing a “reasonable” recovery in sales volumes and revenue thanks to a boost in consumer confidence, executive vice president Shekhar Ramamurthy said on Sunday.
Sales of alcoholic beverages have been largely affected by the closures due to the Covid-19 pandemic and some policy changes, he added.
Allied Blenders and Distillers (ABD) is engaged in the manufacture, marketing and sale of alcoholic beverages in India and abroad.
Its manufacturing network includes one owned distillery, nine owned bottling units and 22 non-owned manufacturing units.
The IPO-related company’s product portfolio includes 10 brands of Made in India Foreign Liquor (IMFL) across whisky, brandy, rum and vodka. Some of the company’s leading brands include Officer’s Choice Whisky, Sterling Reserve Whisky, Jolly Roger Rum and Class 21 Vodka.
The company sold 37.32 million cases of IMFL in fiscal 2019, which fell to 33.23 million in fiscal 2020 and fell further to 25.52 million in 2019. exercise 21.
Today, the consumption of alcoholic beverages in India is rebounding. A recovery was seen in sales volumes, with the company selling 20.66 million cases of IMFL in the country in the nine months ended December 31, 2021.
“We are seeing a reasonable recovery in sales and revenue as consumers go to bars to consume alcohol. In the two years of the pandemic, consumption in bars was almost at a standstill,” said Ramamurthy at PTI.
He further stated that the economy is in recovery mode, consumer confidence is gaining and the company is investing in marketing its brands which will ultimately help the business.
Besides sales, revenue has also been affected. The operating revenue of the company was Rs 8,934.6 crore in the financial year 2019 which fell to Rs 8,119 crore in the financial year 2020 and further decreased to Rs 6,379 crore for the year 2019. fiscal year 2021. For the nine months ended December 2021, operating revenue was Rs 5,445 crore.
Ramamurthy, who is convinced of the growth of the alcohol industry, said: “The space is going to see some action as the Indian alcohol industry is vibrant, consumption is increasing, there is less social and cultural taboos on the consumption of alcohol which were previously common investors, but also institutional investors, seek to invest in this space because it is a long-term business, which is not dependent on the vagaries of technology “.
ABD filed preliminary documents with the Securities and Exchange Board of India (Sebi) last month to raise Rs 2,000 crore through an initial public offering.
Speaking about the company’s IPO, Ramamurthy said, “Now is the right time to go public. There is an appetite for these kinds of products.”
The proposed IPO by the company includes a new issue of shares worth Rs 1,000 crore and an offer to sell (OFS) in the amount of Rs 1,000 crore by the promoter and the promoter group entity .
Under the SFO, Bina Kishore Chhabria will offload shares worth up to Rs 500 crore, while Resham Chhabria Jeetendra Hemdev and Neesha Kishore Chhabria will sell shares worth Rs 250 crore each, according to the plan. of Red Herring flyers. (DRHP).
Much of the proceeds from the new issue will be used to repay company debt and for general corporate purposes. After that, the company, which has a debt of Rs 700 crore, will become “net debt free”, Ramamurthy said.
Speaking about ABD’s expansion plans, he said the company is looking to increase capacity and further investment over the next 12 to 24 months.
In terms of strategies, the company will focus on increasing market share of Officer’s Choice whiskey across all regions and launch new products in premium, semi-premium and luxury segments to strengthen its presence in other categories and improve brand awareness and engagement through digital marketing.
COVID-19 is leading to the opening of an e-commerce and home delivery channel for the alcoholic beverages market in the country and in May 2020, some states launched e-commerce trials for the first time in response to overcrowding at liquor stores, which followed the easing of the country’s lockdown measures.
Additionally, the company intends to pursue strategic acquisitions, investments and other strategic alliances that can help it enrich its product portfolio and expand its customer base.