Allied Blenders and Distillers IPO open for subscription today: 10 key risks investors must consider before investing

  • Allied Blenders and Distillers, known for brands like Officer's Choice and Sterling Reserve, launches IPO with price band of 267 to 281. The company aims to raise 1,000 crore through fresh equity shares. It also plans to utilise funds for debt repayment and general corporate purposes.

Dhanya Nagasundaram
First Published25 Jun 2024, 11:39 AM IST
Allied Blenders and Distillers IPO date of subscription is scheduled for Tuesday, June 25, and will close on Thursday, June 27.
Allied Blenders and Distillers IPO date of subscription is scheduled for Tuesday, June 25, and will close on Thursday, June 27. (https://www.abdindia.com/)

Allied Blenders and Distillers IPO subscription has began today (Tuesday, June 25), and will end on Thursday, June 27. The Allied Blenders IPO price band is set at 267 to 281 per equity share, with a face value of 2. About 449.1 crore has been raised by the business from anchor investors in advance of its Tuesday, June 25 initial public offering. 

Fresh equity share issuance valued at 1,000 crore and a promoter offer-for-sale (OFS) of shares valued at 500 crore make up the initial share sale.

Resham Chhabria Jeetendra Hemdev, Bina Kishore Chhabria, and Neesha Kishore Chhabria would all sell shares as part of the OFS. 

Also Read: Allied Blenders and Distillers IPO: GMP, date, subscription status, review, other details. Apply or not?

A portion of the 720 crore in proceeds from the new issuance would be utilised for general company purposes and the remainder towards debt repayment.

As of December 2023, the company's total debt was believed to be about 808 crore.

Allied Blenders and Distillers is a company that produces, markets, and sells alcoholic drinks both domestically and internationally. As of Fiscal 2023, the company has a market share of more than 8% in the Indian-Made Foreign Liquor (IMFL) industry based on sales volumes. The company's product line includes many IMFL brands of vodka, rum, whiskey, and brandy. Among the company's well-known products are Class 21 Vodka, Jolly Roger Rum, Officer's Choice Whisky, and Sterling Reserve Whisky.

Also Read: Allied Blenders and Distillers IPO: From price band to GMP - here are 10 things to know before subscribing to the issue

Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):

Allied Blenders and Distillers IPO - Key Risks 

  • The company's revenue from operations in Fiscal 2021, 2022, and 2023 was primarily derived from the sales of its whisky products, which generated 97.58%, 96.90%, and 95.38% of that revenue, respectively, and 95.76% and 94.33% of that revenue for the nine months that ended on December 31, 2022, and December 31, 2023. Any decline in these goods' sales might have a significant negative impact on the company's operations, prospects, financial situation, and business.
  • The company's PAT Margin and profit after tax for the year/period have historically fluctuated greatly. There is no assurance that they will become better or that their business will be able to make more money in the future.
  • The Indian-made foreign liquor (IMFL) market is becoming more competitive, which might lead to pressures that negatively impact their operations, cash flows, prospects, company, and financial situation.
  • The operations and financials of their business may be impacted by any previous or present measures taken by the Central Consumer Protection Authority or any other statutory or regulatory organisations.
  • Their operations, financial situation, and company might all suffer if their agreements with the bottling facilities are terminated.

Also Read: Allied Blenders & Distillers raises 449.1 crore from anchor investors ahead of public issue

  • In the regular course of business, the company entered into a number of related party transactions. However, they are unable to guarantee that these transactions won't negatively impact their operating and financial performance.
  • The market for their products may be impacted by a tax rise or modification to the tax calculation formula, which might have a negative impact on their business, finances, operational performance, and future prospects.
  • Many Central and State rules apply to the company's activities. Modifications to the regulatory landscape might result in higher expenses for us or restrict our ability to conduct business.
  • Income tax authorities are now investigating the firm; the company is not aware of the outcome of these investigations at this time.
  • The firm might not be able to raise the price at which its products are sold, which might have a negative impact on its operations, financial situation, business, and prospects.

Also Read: Allied Blenders and Distillers IPO: From key products to financials, here are 10 key things to know from RHP

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:25 Jun 2024, 11:39 AM IST
HomeMarketsIPOAllied Blenders and Distillers IPO open for subscription today: 10 key risks investors must consider before investing

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