Sebi approves PepsiCo bottler Varun Beverages’ Rs1,000 crore IPO
Varun Beverages is currently conducting investor roadshows and is looking at launching the IPO sometime in October
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Mumbai: Varun Beverages Ltd, the world’s second largest PepsiCo Inc. bottler, has received approval from the stock market regulator for an initial public offering (IPO) of over Rs.1,000 crore. The company, the flagship firm of Delhi-based billionaire Ravi Jaipuria, had filed its so-called draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) on 21 June.
In an email confirming the development, Varun Beverages said it received the clearance on 31 August. “The timing of opening the IPO will be decided by BRLMs (Book Running Lead Managers),” it said.
Varun Beverages is a distributor of PepsiCo products across 17 states and two Union territories in India and is the largest bottler for the US-based beverage maker in South Asia, with operations in India, Nepal and Sri Lanka. It also holds rights to sell several PepsiCo products in Morocco, Mozambique and Zambia.
According to one person aware of the development, who spoke under condition of anonymity, Varun Beverages is currently conducting investor roadshows and is looking at launching the IPO sometime in October.
Mint had reported in March that Varun Beverages, the flagship firm of Delhi-based billionaire Ravi Jaipuria, may raise at least Rs.1,000 crore through an IPO.
The initial public offering will consist of a sale of 15 million new shares and an offer for sale of as many as 10 million shares by the Jaipuria family, according to the DRHP filed by the company. The company plans to use the primary proceeds from the IPO for prepayment or scheduled repayment of a portion of outstanding debt, according to its DRHP.
“Varun Beverages is looking to raise around Rs.700-750 crore of capital for this purpose,” a second person aware of the matter said, also requesting anonymity.
Kotak Mahindra Capital Co. Ltd, Axis Capital Ltd, CLSA India Pvt. Ltd and Yes Securities (India) Ltd are the bankers to the IPO. “We have received the final Sebi Observation Letter but we are yet to ascertain the timing for launch of the IPO,” said a Yes Securities spokesperson in an email response.
Varun Beverages is a unit of Jaipuria’s holding company RJ Corp., which has diverse business interests ranging from beverages, dairy products and fast-food restaurants to education and hospitality.
Private equity firms Standard Chartered Private Equity and Aion Capital Partners are investors in Varun Beverages. Standard Chartered invested $48 million and $32 million in the firm in 2011 and 2012, respectively.
Aion Capital Partners, a joint venture between private equity firms Apollo Global Management and ICICI Venture, invested $90 million in Varun Beverages in October last year through a mix of primary capital infusion and purchase of shares from Standard Chartered Private Equity.
For the year ended 31 December 2015, Varun Beverages reported a revenue of Rs.3,408.4 crore, compared to Rs.2,517 crore in the previous year. It reported a profit of Rs.87 crore in the year ended 31 December 2015, as against a loss of Rs.20.1 crore in the previous year.
The company produces and sells PepsiCo’s carbonated soft-drink brands Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Seven-Up Revive and Evervess.
It also produces and sells PepsiCo’s non-carbonated drinks Tropicana Slice, Tropicana Frutz, Nimbooz as well as packaged drinking water under the brand Aquafina. Globally, it’s the second largest bottler of PepsiCo. beverages, behind Tingyi Holdings Corp. of China.
It manages several PepsiCo bottling plants across India—in Haryana, western Uttar Pradesh, Rajasthan, the Northeast, Goa and the National Capital Region centred around Delhi. The company operates 16 production facilities in India and five production facilities in other geographies.
So far this year, 17 companies have raised Rs.11,936.5 crore through IPOs, according to data from primary market tracker Prime Database.
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