BackAllied Blenders & Distillers hires new CEO ahead of planned IPO
Anupam Datta has been named as ABD managing director and chief executive officer
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Mumbai: The Kishore Chhabria-run Allied Blenders & Distillers Private. Ltd (ABD), which is planning to go public with around ₹ 1,000-crore issue over the next 18 months, has hired a new managing director and chief executive. The largest home-grown liquor company—the UB Group is now owned by the British giant Diageo Plc—has roped in Anupam Datta, a veteran marketer and the man behind the successful launch of the Reliance Industries-promoted football league, the Indian Super League, as the new managing director and chief executive officer.
“Datta has taken charge since the mid-July. With his arrival, my role will be limited to strategy and planning apart from preparing ABD for the ₹ 1,000 crore share sale. Also, from now on, I will be only the executive vice-chairman and will not be involved in the day-to-day running of the company," Deepak Roy, the incumbent executive vice-chairman and chief executive said. Before joining ABD, Datta was heading Kellogg’s South Africa and prior to which he was heading the American cereal major’s operations in the country. It can be noted that both Roy and Datta worked together in the past with Diageo before Roy moved to UB for a while. When asked about his plans for the company, Datta refused to comment saying he is still studying the company.
On the initial public offering (IPO) plan, Roy, who holds 5% stake in the company that owns the world’s largest spirits brand Officer’s Choice even overtaking Smirnoff vodka from the Pernord Ricard stable, said, “We are working on it. We should hit the market over the next 12 to 18 months and we plan to raise about ₹ 550-750 crore. But if we continue our breakneck growth as we have been doing in the past many years, and go ahead with our aggressive expansion plans including some takeovers, then the amount can be up to ₹ 1,000 crore," Roy said.
Roy said that though specifics are being worked out, he is valuing ABD at an enterprise value of ₹ 6,000 crore by the end of this fiscal year. The company had reported a revenue of ₹ 2,500 crore net of excise in 2014-15, which was a growth of 31% over the previous fiscal year, according to Roy.
ABD does not have any long term debt on its book, but some ₹ 550 crore working capital loans, Roy said, adding the company has been funding all these expansions and acquisitions from internal accruals. But going forward, it may have to look for debt-driven capex, therefore the IPO. He also said the company has asked JM Financial to work on the IPO as the lead-manager. For the 2015 fiscal year, ABD reported a 29% jump in sales at 32 million cases, up from 25 million cases in 2013-14, led by its marquee brand Officer’s Choice, while the domestic liquor industry barely managed to post a paltry 3% sales growth. ABD has been clipping at a compound annual growth rate of 21% over the last five years. One case contains 9 litres of spirit.
Against this, Roy said, the new fiscal year saw the industry declining by 2%, while only ABD and Pernord Ricard has been growing at high double digits. “The journey from 5.2 million cases about eight years ago to 32 million cases 2014 is a testament to the strength of our brands and this achievement will serve as the best springboard for us to now reach greater heights in the coming years," Roy said. The flagship brand Officer’s Choice whisky clipped at 16% growth in 2014-15, taking its market share to 37% of the regular whisky segment, while the semi-premium whisky Officer’s Choice Blue, crossed 7 million cases, within three year of launch, growing at 100%.
ABD also sells rums, vodkas and brandy and its portfolio of brands includes Jolly Roger Rum, Lord & Master Brandy, Class 21 Vodka and Wodka Gorbatschow. Early last month, the company bought Shasta Bio Fuels, a grain distillery unit in Telangana for ₹ 200 crore. ABD will make an additional investment of ₹ 50 crore to upgrade the distillery by improving operations, value added byproducts and effluent treatment over the next 18 months. ABD has five company-owned and three-contracted bottling plants and a distillery in Andhra Pradesh with 15 sales offices across 22 states.
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