Posted: Sunday, 19 February 2023 12:58
Integra Essentia: A Public-owned company buys Indage Vintner Winery Assets
A small-cap company with a market valuation of ₹314 Cr, Integra Essentia Ltd operates currently in the FMCG sector. It is in the business of providing infrastructure, energy, food, and clothing. As part of its long-term business expansion plan it has announced that it has acquired the assets of Indage Vintners, earlier known as Chateau Indage for Rs.40 Cr.
“These assets comprise Winery Land of about 59,000 square meters, buildings of 16,600 square meters and equipment including 60 lakh liters stainless steel storage, 4 bottling lines, 2 crushers/pressers, online cold stabilization and filtration tanks etc. surrounded by thousands of acres of planted vineyards, which will ‘enable Integra Essentia to have easy access to quality grapes, perfectly ripened harvest to release the juices through crushing in its purchased processing units and the winery to be run individually or in a joint venture with another industry player, said Integra Essentia in a statement to Bombay Stock Exchange on February 15.
Vishesh Gupta, Managing Director of the Integra Essentia says, ‘our goal is to significantly expand the company’s business. We are making every effort to strategically align all components of the supply chain for necessities of life. Purchase of winery assets from Edelweiss Assets Reconstruction Co. Ltd. is one such step.’
The shares of Integra Essentia Ltd closed on Friday on the BSE at ₹6.87 apiece, down by 0.43% from the previous close of ₹6.90. On NSE it went up by 5% to Rs. 7.35 offering a good arbitrage opportunity. In the last 1 year, the share has generated a multibagger return of 321.21% on BSE and much more on a YTD basis on NSE, according to Moneycontrol.
With a PE ratio of 63 and market cap of Rs.335.92 Cr Integra Essentia Ltd. ( For proper perspective, Sula’s market cap based on Friday closing price of Rs. 385.60 a share, is Rs. 3,250 Cr), the company seems to be too small to worry about, according to market sources.
Integra Essentia Limited, earlier known as Integra Garments & Textiles Limited is a Delhi based company engaged in business of Life Essentials- Food (Agro Products), Clothing (Textiles and Garments), Infrastructure (Materials and Services for Construction and Infrastructure Development) and Energy (Materials, Products and Services for the Renewable Energy Equipment and Projects).
Commenting on the development, Mr. Vishesh Gupta, Managing Director of the Integra Essentia
said “our goal is to significantly expand the company’s business, market reach, and profitability. We are initiating the process to identify and engaging necessary team of professionals, partners and strategic alliances to put these assets to use at the earliest so that they start contributing significantly in company’s revenue and bottom-line without much delay”
Edelweiss and ONIV Beverages
‘Edelweiss Assets Reconstruction Co. Ltd had taken over the bank loans of the erstwhile Indage Vintners and was handed over these assets by the liquidator’, says Jagdish Holkar, President of All India Wine Producer Association. Under another Agreement, the property and assets were leased out to Oniv Beverages to produce and sell wine under certain conditions. Oniv, on their part, contracted for the processing of wine and grapes- a process still continuing’. Integra might have to legally sort out several matters before a steep upward journey can be sustained.
Indian wine Industry on the move
The last 2 years (2021-23) have been very encouraging for the Indian wine industry. Holkar says, ‘our industry is booming right now. It is not difficult to sell whatever wine we produce but financial resources to expand are the real bottleneck.’
Sula Vineyards, the largest producer, came out with a public issue last December at Rs. 357 a share and is selling at a premium at Rs. 386 a share-after hitting a low of Rs. 305 and a high of over Rs. 432 last month. The sales of its domestic labels jumped to Rs 187.2 crore in Q3 FY23, 13 percent higher than Rs 165.7 crore clocked in 2021 during the same quarter.
Grover Zampa which has almost 90 per cent of its businesses in the metros of Delhi, Mumbai and Bengaluru. has been through some challenging financial times and despite introducing several wines and a marked improved quality, it has not been able to grow its share or even maintain it during the last couple of years. Ravi Viswanathan, who owns more than 50% of the shares through his PE company VisVirus Capital, hopes to achieve a sale of Rs. 100 crore in 2022-23, doubling it the following year-seemingly a hard nut to crack.
Fratelli Wines which overtook Grover Zampa about 3 years ago in sales and became the second largest producer, has ambitious plans and expects to have a high double digit growth in 2022-23 and 2023-24. They are reportedly the market leader in Delhi and expect a further growth of at least 20-25% during these 2 years. They are also betting on a growth in the imported wine segment and are preparing a big portfolio of imported wines to be launched by April this year. Clearly, they want to decrease the gap between Sula and increase the lead between their nearest competitors, Grover Zampa.
Both Fratelli and Grover have been eying an IPO and encouraged by the success of Sula’s public issue are perhaps clearing up the decks to pave way sooner than later. It would be interesting for an unknown entity like Integra Essentia to come from behind and simply by buying building and winery assets of the erstwhile Indage Vintners and leapfrog to the top. Unconfirmed rumours persist that Ranjit Chougule, elder son of late Shamrao Chougule, Founder of Champagne Indage (Chateau Indage), has been working behind the scene in an effort to regain part of the Lost Chougule Empire.
Incorporated on August 6, 2007 as Five Star Mercantile Private Limited. Integra Essentia was converted into a public limited company on January 3, 2012. The name of the company underwent a change to ‘Integra Garments & Textile Ltd. in June 2012. And last year to “Integra Essentia Limited. It does not seem to have inherent expertise to run a wine business.
At any rate, the more the producers, the merrier it would be for the consumer and the industry!! The boom period seems to have started in the Indian wine industry.