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Sula maker seeks private equity capital

Sula maker seeks private equity capital
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First Published: Thu, Feb 25 2010. 12 10 AM IST
Updated: Thu, Feb 25 2010. 12 10 AM IST
Mumbai: India’s leading wine company, Nashik Vintners Pvt. Ltd., which is known for its Sula wines, is looking to raise private equity capital through the issue of new shares, its founder said.
The company plans to raise the money to expand into tier II cities and boost capacity.
“Talks are on and a decision will be taken soon,” said Rajeev Samant, managing director. The equity divested will amount to a minority stake, he said.
The Indian wine market is estimated at Rs250-400 crore with the company’s share at 30-35%. Its Sula brand is priced upwards of Rs500 while the Samara brand starts at Rs150 a bottle. “We are growing at 45% and acquisitions will be on the cards two years from now,” Samant said.
The Samara brand, launched at the end of 2008, helped the firm beat the downturn as it drove volume sales.
“We now plan to penetrate tier II cities with Samara,” said Samant, who plans to open around 700 wine-tasting clubs across the country in places such as Punjab, Bihar and Assam. “These are places where people have no access to our wines.”
In 2004, GEM India Advisors (GIA), a private equity fund then headed by Deepak Shahdadpuri, had invested $3.5 million (Rs16.20 crore) in Sula Wines for a stake of around 35% and two management seats.
“The company had required capital infusion in the past to double its manufacturing capacities, and this time it requires it for brand building, extension and penetration into new markets,” said Shahdadpuri.
GIA’s stake dropped to 18% as other investors entered before Shahdadpuri left in 2008 for Baer Capital Partners, where he is managing director.
shraddha.n@livemint.com
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First Published: Thu, Feb 25 2010. 12 10 AM IST