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Posted: Friday, 03 June 2022 00:22

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Sula finally plans an IPO of up to Rs. 1400 Crores

June 03: India’s largest wine producer since 2009, with production flirting with one million cases a year for the last few years, the Rajeev Samant founded winery that made modest beginning in 1999, has finally decided to go public and unlock the capital invested by several entities including PE finds, with an IPO of Rs. 1200-1400 Cr, according to a Report by Economic Times, writes Subhash Arora

Nashik-based Sula Vineyards is likely to soon file its documents with the market regulator Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) soon, said banking sources, indicating that the IPO size could be in the range of Rs. 1,200 Cr to Rs. 1,400 Cr.

The company has reportedly appointed Kotak Mahindra Capital, CLSA Hong Kong, and IIFL as the bankers for the IPO, which will comprise a fresh issue of shares and an offer for sale from some existing investors.

Though Rajeev Samant made sure to remain the largest single owner, he capitalised big time over the last several years to finance the expansion and was backed by various private equity funds and institutional investors, including Verlinvest, Everstone Capital, VisVires (managed by Ravi Viswanathan, Chairman of Grover Zampa Vineyards), Saama Capital, and DSG Consumer Partners. Belgium-based Verlinvest, has been an early investor in Sula since 2010, and has invested over $70 million into the company in multiple tranches.  

The winemaker, which set up its winery in 1999, has over 13 labels like Rasa, Sula, The Source, Kadu, Tropicale, Seco and Dia etc. thus covering the entire price brackets and has established a formidable distribution network across 24 states, beaten only by the French wine and spirits maker Pernod Ricard. It has wineries across Maharashtra and Karnataka.

Sula has today over 2,000 acres of vineyards under management with the most of them being on long-term contract with farmers in Nashik, South Maharashtra, and Karnataka. Its domestic market share by value has risen from 33% in 2009 to 52% in 2019-20, including the low ended wines like Port and Dia. It registered a double digit growth in 2021-22.

Sula is also has its footprints in the import market through Sula Selections with labels like Torres, Le Grand Noir and Hardys being predominant. Sula also introduced the concept of wine tourism and with almost 400,000 visitors coming to taste and/or visit the vineyards every year, it is a leading company in this area as well, winning international accolades.

The other details of this proposed IPO are not yet disclosed. But as the second public issue relating to wines (the first one by Indage vintners which was very successful but the company later went bankrupt), it ought to offer an interesting opportunity to acquire shares in the only public limited wine making company in India. The other companies which have been following Sula, waiting in the wings to bring their own IPOs – Grover Zampa and Fratelli are likely to start girdling up to follow suit. In fact, Ravi Viswanathan has been a vocal supporter of going public for several years and withdrew the holdings when Rajeev Samant had put down his feet and refused to go public several years ago, after which VisVires had sold out his share.

Rajeev Samant who has been travelling quite a bit lately, has returned to Mumbai. He informed delWine,’ I neither confirm nor deny anything on the IPO news.’ But he did comment that Ravi’s (VisVires) exit had nothing to do with the IPO. He never said let’s go public or had any disagreement with him on this. He exited because Reliance Capital wanted to exit Sula and they had entered Sula together.

Subhash Arora

 

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