Jan 12: The maverick French investor of Indian origin, who is a partner in the 7 year old VisVires Capital Singapore, entered Indian wine industry quietly by buying shares of Grover Vineyards and within 5 years also invested and exited from Sula and helped Grover buy Four Seasons, Charosa and Myra Vineyards besides a winery in Burgundy and getting a controlling interest, writes Subhash Arora who believes his entry has brought stability in the industry, a vision and potential threat to Sula as the industry leader
The soft spoken, nondescript but unstoppable like a tidal wave, PIO Ravi Viswanathan is all set to conquer what he set out to do in 2012 rather quietly and without creating ripples when he got his foothold in Grover Zampa Vineyard and helped save it from a financial quagmire and making the deal with Vallee de Vin and exit of Brindco possible.
The Private Investment Banker, with different funds under the VisVires Capital umbrella and set of global investors is savvy enough to quietly pump the money in an industry that was labelled as a stagnating industry on the verge of collapse with Chateau Indage already having gone bankrupt due to its maverick policies taking down many farmers and small wineries. But with his brilliant vision and perseverance Ravi managed to ‘collect’ wineries that are important from various angles- Four Seasons is like a beautiful Bordeaux chateau and heavenly wine tourism destination, making fairly decent wines. Charosa earned a name in the market because of the State-of the Art winery in Charosa Village, about 40 kms from Nashik and making excellent wines.
The final deal is to be signed by the parties between now and Monday, affirms Vivek Chandramohan, CEO of Grover Zampa Vineyards who was at a meeting going through the legal documents when I talked to him on phone. He is the signatory for the deal, authorised to sign by the Board on behalf of the company. When I had met him in Delhi a few months ago, he had confirmed the MOU with Charosa and said talks were going on with United Spirits but nothing had been finalised signed and requested me not to write about it.
Earlier, Anil Ambani who had invested through Reliance Capital in alliance with Ravi Viswanathan in both Grover Zampa and later with Sula had reportedly said at a meeting with analysts in March 2017 and reported in delWine that he planned to get out of non-core businesses and that the two wine companies stuck out; "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". He had set a target of March, 2018 to exit the businesses-and apparently made good profits on the sale.
Sula creates wealth for Ravi
What has been an open secret in the market place was confirmed to delWine by both Rajeev Samant, Founder CEO of Sula group and Ravi Viswanathan. Rajeev says, ‘Yes he exited Sula completely when Reliance Capital exited, almost a year ago. I can’t comment on the quantity of his stake.’ Ravi Viswanathan also confirmed what has been in the public domain for quite some time, ‘True but not publicly disclosed,’ he affirms.
Bit of help from friends like delWine
Since those early years since 2014 when I met Ravi a few times and once even had a long interview over dinner at The Aman Hotel (now Lodi) where he told me of his unconventional strategy to bring Sula and Grover together under one corporate umbrella but running their businesses independently, the interview had raised a major controversy as both the head honchos had very strong reservations about this scenario, perhaps making him change his investment strategy. He wanted to go public, thus unlocking wealth; a very normal approach internationally as many wine players overseas agree but not acceptable yet in India.
When he asked me which companies were potential sellers, I had recommended him Alpine (near Bangalore run by Gowda family) with a State-of-the-Art winery, Charosa (again a very modern winery and as I had found at a Tasting in October 2013 some excellent wines, but they started having financial troubles), and Four Seasons which Diageo owned and it had no synergy with the liquor business after they bought United Spirits. It has been languishing with the VP and the Unit Head Abhay Kewadkar maintaining a brave face and barely keeping the winery running to keep interest of the suitors alive. At the back of the issue was the mounting interest and the money overspent for the wineries to be ultra modern.
The astute Ravi Viswanathan kept on persevering with these wineries (or the other way around!) and stuck the deals. Alpine was a dead-end because of the family problems within two factions making the purchase impossible. However Ravi pulled another coup when he suddenly announced a couple of weeks ago that he had bought Myra Vineyards! Curiously, Ajay Shetty, the owner who founded Myra in 2011 was also an investment banker bored with counting numbers and had plunged into winemaking with seemingly unsatisfactory results and so it must have been easier to deal with him.
Vivek confirms that plans are already afoot to make Myra a ready-to-drink (RTD) wine spritzers and carbonated wines in cans making company and perhaps sparkling wines from Charmat method to attract the youth. This could be replicating the model chosen by Ashwin Rodriguez, the Barossa-educated winemaker who owns Good Drop Cellars and produces wines labelled as Rio and Casablanca at Vinchur Wine Park near Nashik.
While he was negotiating with these entities he was also courting wineries overseas and as reported by delWine in August 2018 he bought the historic Burgundy winery Château d ‘Etroyes in Mercurey, through his French partners in one of the Funds being managed by VisVires and brought them into Grover Zampa on the Board as well. This purchase made Grover Zampa an international entity (not the first Indian company though; Chateau Indage had bought wineries and bottling plants in Australia and UK respectively before going bust).
Earlier, The Labruyere family with its winemaking roots in Beaujolais and wings spread to Burgundy, Bordeaux and Champagne had entered into a strategic partnership with GroverZ through one of the finds owned by Ravi’s Visvires Capital that holds around 30% shares of the company, with the co-owner Edouard Labruyere joining the Grover Zampa Board in March 2016 and reported by delWine.
Ravi Viswanathan- Uncrowned King of Indian wine industry
Exactly three months ago, delWine declared Ravi Viswanathan a ‘King of Indian Wines.’ One thing that emerged recently is that he is the dark horse and the uncrowned king of the Indian wine industry now. He has fingers in many pies. He is a shrewd man who knows how to play a long term game, He had told me during an interview that he had being studying the Indian wine industry since the 1990’s and was very positive about its future and clear on his course of action; the short term problems did not bother him.
A smart man in the Private Equity business, he has been able to enter Grover Zampa, in and out of Sula and now investing more and more into the former. Whether it is Charosa or Four Season or even Château d ‘Etroyes in Mercurey, Burgundy, making Grover Zampa a part of the winery and diluting stakes of the initial promoters in the meanwhile; he is the man behind all the actions.
A Report yesterday in Times of India, tells our story by putting numbers. It says ‘the stake of Grover comes down from 11% to 6% after the acquisition of Charosa and Four Seasons while Viswanathan’s share will go up from 50 to69%.AVT, Quintela and Vallee de Vin will continue to hold 9%, 10% and 6% respectively. Though difficult to swallow the numbers (how could Grover and Valle de Vin hold the same 6% each when Grover had a thumping majority in 2012 when the merger took place- unless Kapil Grover sold a vast majority of his family stakes at huge profit to Viswanathan, and being satisfied with a minor role).
This is a matter to be sorted out from public records at the Registrar of Companies office or for the financial papers to evaluate; the fact remains that Ravi Viswanathan is emerging as the king of Indian wine industry and is sharpening his weapons to take Sula head-on as the leader of the industry by pocketing a few more wineries. He has grandiose plans of reaching 1 million cases in 5 years and if they succeed, they will put the Indian wine industry on a firm footing and make the business interesting, though spelling doom for the smaller companies with Fratelli also having joined the big league behind Grover as the 3rd largest player with a sale of around 200,000 cases a year –trailing behind Grover in a race that is getting hotter and more interesting.
One thing is clear; the government is about to make much more money from taxes due to sales than it ever hoped-and without extending much of any help and the investors can hope to make money if and when the King’s cherished dream of making the group go public, materializes.
The public issue was on the canvas in 2014; it may become a stark reality by 2020, though with changed players in action.
For earlier related Articles, please visit:
Blog: Amongst Confounding Statistics Ravi Viswanathan is the King of Indian Wine Industry
Grover Zampa plans Ambitious Growth from Bangalore to Burgundy
Reliance Capital to sell stakes in Sula and Grover Zampa?
Labruyeres of Beaujolais and Burgundy Invest with GroverZ
Rodrigues: Sparkling Man from Rio and Casablanca
Star Interview: Ravi Viswanathan- Co-owner of Grover and Sula –Part I
Grover and Zampa Merger Moves into Final Round