Home / Companies / Verlinvest in talks to pick up minority stake in Grover Zampa

Mumbai: Verlinvest SA, the Belgian private equity fund created by the founding families of Anheuser-Busch InBev, is set to consolidate its position in the Indian wine industry and is in advanced talks to acquire a minority stake in Grover Zampa Vineyards Ltd, according to two people familiar with the matter.

Grover Zampa is the entity born out of the merger between Grover Vineyards Ltd and Vallée de Vin Pvt. Ltd.

Verlinvest already holds about 15% in India’s largest wine maker, Nashik Vintners Pvt. Ltd, known for its Sula brand. Nashik Vintners has a 45-50% share of the Indian wine industry, while Grover Zampa has around 15%.

“The deal will help Verlinvest consolidate its position as the largest stakeholder in the Indian wine industry," said one of the two people cited above, speaking on condition of anonymity.

In 2012, Bengaluru-based Grover Vineyards merged with Nashik-based Vallee de Vin to form Grover Zampa Vineyards, the third largest Indian vintner after Sula. Vallée de Vin was floated in 2006 by liquor industry veterans Deepak Roy, executive vice-chairman, Allied Blenders and Distillers Pvt. Ltd, and Ravi Jain, a former managing director of Shaw Wallace and Co. Ltd.

In Grover Zampa, chairman Kapil Grover holds about a 38% stake; Jain, Neeraj Deorah and Roy hold about 20%; and the rest is held by various investors, including Singapore-based investor Ravi Viswanathan and Reliance Capital.

“The deal is likely to happen at an enterprise value of about 200 crore for Grover Zampa," said the second person cited above who asked not to be identified.

“We do not comment on rumours," said a spokesperson for Verlinvest, while Kapil Grover did not respond to an email seeking comment.

Last year, Viswanathan acquired about 30% in Nashik Vintners along with Anil Ambani-owned Reliance Capital. Through a secondary transaction, the duo had bought the stake owned by private equity firm Everstone Capital Advisors.

According to a report in Business Standard, Viswanathan bought a 11% stake while Reliance Capital acquired 19% in Sula. The deal was done through Visvires Indian Wineries Pvt. Ltd, a vehicle floated for investments in India. Viswanathan already holds a significant minority stake in Grover Zampa Vineyards along with Reliance Capital.

“The investors are keen on the long-term prospects of the Indian wine industry. There are only a handful of organized firms in the Indian wine industry and private equity investors are happy to invest in the leaders which helps them to consolidate their position in the industry," said Subhash Arora, president, Indian Wine Academy, a Delhi-based wine promotional platform.

According to a survey by Vinexpo SAS, which runs wine exhibitions and also a wine website, wine consumption in India is likely to increase 73% to 2.1 million cases by 2017 from 1.21 million in 2013. “More than 61% of the wines drunk in India are red, which is expected to grow 71.6% between 2013 and 2017," it said.

“Indians have traditionally been more interested in spirits, and that leaves wine consumption far behind. India is currently the fifth largest spirits importer in Asia, and by 2017, will rank fourth," according to the Vinexpo forecast, overtaking Thailand.

Founded in 1995, Verlinvest has €1 billion of net assets, across multiple geographies. It has a wide exposure in India with several investments in consumer segments.

In 2012, Verlinvest acquired a 20% stake in Cuisine Asia, a Mauritius-based holding company set up by Everstone Capital Advisors to manage its food and beverage portfolio. In 2013, both together acquired an over 90% stake in Singapore Stock Exchange-listed restaurant firm Harry’s Holdings Ltd.

The same year, Verlinvest also picked up a 10% stake in Future Lifestyle Fashions, owned by Kishore Biyani’s Future Group.

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