Decoding the Allied Blenders and Distillers IPO - Check Issue Date, Offer Details, and More

Key Highlights:

• The IPO size of Allied Blenders and Distillers is Rs 1500 crores
• While fresh issue consists of Rs 1000 crores, offer for sale make up the remaining Rs 500 crores

The largest Indian-owned Indian-made foreign liquor (IMFL) company, Allied Blenders and Distillers, is all set to launch its initial public offering (IPO) on 25th June. The offer consists of a fresh issue and an offer for sale.

About Allied Blenders and Distillers

Allied Blenders and Distillers was India's third-largest IMFL Company in terms of annual sales volumes between fiscal 2014 and fiscal 2022. It's only four spirits companies in India with a pan-India sales and distribution footprint. The company is also a leading exporter of IMFL and had an estimated market share (in terms of sales volume) of 11.8% in the Indian whisky market for fiscal 2023.

Its product range consists of five main IMFL categories — whisky, rum, brandy, vodka, and gin. It also sells packaged drinking water under its brands Officer' Choice, Officer' Choice Blue, and Sterling Reserve.

IPO details and objectives

The company's IPO consists of fresh issue aggregating up to Rs 1000 crore and an offer for sale aggregating up to Rs 500 crores. The total offer size is Rs 1500 crores. Promoters Bina Kishore Chhabria, Resham Chhabria Jeetendra Hemdev, and Neesha Kishore Chhabria are the selling shareholders in the offer for sale, offloading Rs 250 crores, Rs 125 crores and Rs 125 crores, respectively.

The company plans to utilise the net proceeds towards:

• Prepayment or scheduled repayment of a portion of certain outstanding borrowings
• General corporate purposes

Allied Blenders and Distillers financials

Here are some of the key financials of the company as per its RHP:

Key strengths

The company has the following strengths:

• Allied Blenders and Distillers is among the largest IMFL companies in India with a diversified product portfolio.
• It has a strong brand recognition, especially since the launch of Officer's Choice Whisky in 1988 in the mass premium segment
• Extensive PAN-India distribution network
• Well-positioned to capture tailwinds in the Indian IMFL industry
• Experienced Board and senior management team and supported by a committed employee base

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.

Strategies planned

Going ahead, the company intends to implement the following strategies:

• Increase market share of Officer’s Choice Whisky across regions
• Introduce new products within the premium, semi-premium and deluxe segments to strengthen presence in
• Other categories
• Continue to focus on improving operating efficiencies
• Evaluate growth opportunities through selective acquisitions
• Focus on environmental and social practices
• Enhance brand awareness and engagement through digital marketing

Industry overview

India is one of the fastest growing alcoholic beverage markets in the world. It has grown from a small base of 1.3 litres per capita of recorded consumption of pure alcohol in 2005 to 2.7 litres per capita consumption in 2010 and further to estimated 3.1 litres per capita consumption in 2022. Also, in India close to 90% of alcohol is consumed in the form of spirits. The per capita consumption of spirits in India is one of the highest among top economies of the world.

Wrapping it Up

With major Indian indices touching record high, the Indian growth story is pretty much intact. Allied Blenders and Distillers is looking forward to cashing in on this optimism through its IPO. That said, go through the company’s red herring prospectus (RHP) for a complete overview before investing.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.

Investments in securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI prescribed Combined Risk Disclosure Document prior to investing. Brokerage will not exceed SEBI prescribed limit.