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Reliance Capital to sell stakes in Sula and Grover Zampa?

Posted: Monday, 20 March 2017 18:10

 

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Reliance Capital to sell stakes in Sula and Grover Zampa?

Mar 20: Anil-Ambani led Reliance Capital is reported planning to sell the company’s stakes in both Sula and Grover Vineyards by next March under the strategy of selling a substantial portion of the non-core assets by March 2018, though the top honchos of both the companies do not see it happening in the near future, writes Subhash Arora

Click For Large ViewReliance Capital expects to earn huge profit for their investments in the non-core businesses which include Sula and Grover Zampa Vineyards- two leading Indian wine companies in which they claim 70% of the market share jointly. Recently, the company sold a small stake in the leading digital payments major Paytm for about Rs. 2.75 billion, earning a huge 27-time return on an investment of just about Rs. 10 crore (Rs. 100 million).

According to the bureau report the financial services arm of Ambani-led business conglomerate, had acquired shares in the two companies for about Rs. 171 crore during the past three years now.  Reliance Cap is is expecting huge gains according to analysts who attended an analyst meet hosted by Reliance Capital last week, where the chairman Anil Ambani had said all non-core investments would be monetised by March 2018 resulting in large capital gains. The presentation at the meet listed all their private equity investments including Sula Vineyard and Grover Zampa Vineyard.

Analysts quoted Ambani as having said that the two names-Sula and Grover Zampa stood out in the list."It is very strange that we are still invested in those businesses when I am a teetotaller. They command 70 per cent market share in the wine market in India and there are tremendous growth opportunities globally. But that does not mean we should keep those businesses. We will consolidate and move forward. There is a lot of global investor interest in this business and those are great value creation opportunities for us," the Reliance Group chairman reportedly told the analysts.

‘No Comments,’ was the short and pleasant reply from Rajeev Samant, Founder CEO of Sula Vineyards when delWine contacted him.

Kapil Grover, Chairman of Grover Zampa Vineyards was not pleased with the spirit in which the story was reported though. He said, “I have read the Article too. Anil Ambani has just listed the non-core businesses that the Reliance Capital would eventually like to get out of. We have excellent working relationship with him and the company. I am sure he has no plans to exit soon. We had a board meeting on Friday and even then there was not mention of it by their Director.’

Ravi Viswanathan is also a key shareholder through his Private Equity Funds in both the companies and entered both Sula and Grover on different disinvestment occasions and shared with Reliance the stake that was for sale at those ocasions. If the disinvestments were to take place, he would perhaps be the first one to buy Ambani’s stakes, since he is quite knowledgeable about the business directly.

Click For Large View‘In any case, whenever the stakes are sold, the new buyer has to be acceptable to both Sula and Grover,’ clarified Grover when I asked him if the stakes could be sold to anyone at will by these institutional investors. At this point delWine did not contact Ravi Viswanathan in Singapore as it is too premature and speculative at this stage.

And who knows? Anil Ambani might unravel the mystery of wine one day soon in the near future and get as passionate as Sula, Grover and I are;  I was a staunch teetotaller through my stay of around 6 years in Germany and the USA and am a still anti- alcohol. I call myself a Vinotaler (a teetoler who drinks only wine as a beverage having some natural alcohol in it) now and I drink only wine.

Ambani might also want to read my story about Prof Dr. Bipin Desai in Los Angeles, whom I met in 2009 at the World Wine Symposium at Villa d’Este. The Gujarati vegetarian professor did not eat even eat onions and garlic when he went by ship to the US in the 1960’s and used to cook his own meal during college days. Today this physicist has one of the finest multi-million dollar wine collection in the world and is well-known for organising exclusive dinners in California and Europe and rubs shoulders with the top guns of the wine business, after he developed taste for wine during one of his visits to Switzerland. Yes, he is a wine connoisseur too!

Interestingly, it is not the first time the Ambani family has invested in the wine business. It had bought shares in the erstwhile Indage Vintners when it was commanding heavy premium and reportedly burnt most of the investment when the company went bankrupt. This transaction would be a change although it would be ludicrous to expect Paytm kind of returns.

Subhash Arora

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