New Delhi, July 25: Allied Blenders and Distillers, the maker of Officer’s Choice whisky, is seeing a “reasonable” recovery in sales volumes and revenues on the back of a gain in consumer confidence, its executive deputy chairman Shekhar Ramamurthy said on Sunday.
The sales of alcoholic beverages were largely hit by shutdowns due to the Covid-19 pandemic and a couple of policy changes, he added.
Allied Blenders and Distillers (ABD) is engaged in the manufacturing, 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 product portfolio of the IPO-bound firm comprises 10 brands of Indian-Made Foreign Liquor (IMFL) across whisky, brandy, rum and vodka. Some of the major brands of the company 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 declined to 33.23 million in fiscal 2020 and further dropped to 25.52 million in FY21.
Now, alcoholic beverage consumption in India is on the rebound. Recovery has been seen in sales volumes as the company sold 20.66 million cases of IMFL in the country in the nine months ended on December 31, 2021.
“We are seeing reasonable recovery in sales and revenues as consumers are going to bars to consume alcohol. During the two years of the pandemic, consumption at bars was almost a standstill,” Ramamurthy told PTI.
He, further, said that economy is in recovery mode, consumer confidence is gaining and the company is making investments in marketing its brands, which will eventually help the business.
Apart from sales, revenues too were impacted. The company’s revenue from operations was at Rs 8,934.6 crore in fiscal 2019, which fell to Rs 8,119 crore in fiscal 2020 and further declined to Rs 6,379 crore for fiscal 2021. For nine months ended December 2021, revenue from operations stood at Rs 5,445 crore.
Ramamurthy, who is confident of growth in the alcohol industry, said, “The space is going to see action as the Indian alcohol industry is vibrant, consumption is going up, there are less social and cultural taboos about drinking alcohol that were before, common investors, as well as institutional investors, are seeking to invest in this space as it is a long-term business, which is not dependent on vagaries of technology”.
ABD filed preliminary papers with the Securities and Exchange Board of India (Sebi) last month to raise Rs 2,000 crore through an initial public offering.
Talking about the company’s IPO, Ramamurthy said, “This is the right time to go public. There is an appetite for such kind of products”.
The company’s proposed IPO comprises a fresh issue of equity shares worth Rs 1,000 crore and an Offer For Sale (OFS) to the tune of Rs 1,000 crore by the promoter and promoter group entity.
As a part of the OFS, Bina Kishore Chhabria will offload shares worth up to Rs 500 crore, while Resham Chhabria Jeetendra Hemdev and Neesha Kishore Chhabria will sell shares to the tune of up to Rs 250 crore each, according to the Draft Red Herring Prospectus (DRHP).
A large part of the proceeds from the fresh issue will be used to retire the company’s debt and for general corporate purposes. Post this, 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 that the company is looking to increase its incremental capacity and incremental investment in the next 12-24 months.
With regard to the strategies, the company will focus on increasing the market share of Officer’s Choice Whisky across regions, and introduce new products within the premium, semi-premium and deluxe segments to strengthen its presence in other categories and enhance brand awareness and engagement through digital marketing.
COVID-19 leads to the opening of e-commerce and home delivery channel for alco-beverages market in the country and in May 2020, some states launched e-commerce trials for the first time in response to over-crowding in liquor stores, which followed the relaxation of the country’s lockdown measures.
In addition, the company intends to pursue strategic acquisitions, investments and other strategic alliance partnerships that can help it enrich its product portfolio and expand its customer base. (PTI)
Follow our WhatsApp channel
