Nashik- based Sula Vineyards has filed papers with the market regulator Securities and Exchange Board of India (Sebi) to raise capital through an initial public offering (IPO).
The company is planning a pure OFS (offer for sale) and is backed by key shareholder consumer-focused Belgian family office Verlinvest, which made its first investment more than a decade back. Rajeev Samant is the MD & CEO of the company, Moneycontrol reported quoting multiple sources.
“The e-filing of the DRHP with the Sebi has been done. The IPO consists solely of an OFS component, as part of which Verlinvest and the promoter group are amongst the major selling shareholders,” Moneycontrol report said quoting one of the persons close to the company. According to the DRHP, the size of the offer for sale component is up to 25,546,186 equity shares, the source added.
Sula Vineyards is synonymous with Indian wines and is considered a ‘category creator’ in the segment. It has seen a surge in sales in recent quarters with proceeds also coming from the luxury tourism vertical, according to people in the know.
“Kotak Mahindra Capital, CLSA and IIFL Capital are the investment banks working on the issue, “added a third person. Law firms Shardul Amarchand Mangaldas and Trilegal are the legal advisors, he said.
Sula Vineyards declined to comment in response to an email query and responses from Verlinvest, Kotak Mahindra Capital, CLSA & IIFL Capital are awaited, the report said.
Sula is headquartered in Nashik, 180 Km northeast of Mumbai, and has two manufacturing units, one 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 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.
Sula 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 new 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.
