Indian whisky maker Allied Blenders's IPO attracts bids worth $3 bln

Sula Vineyards

27/06/2024 14:04

By Kashish Tandon
       BENGALURU, June 27 (Reuters) - Indian whisky maker
Allied Blenders and Distillers'  ALLE.NS  $180-million IPO was
oversubscribed on Thursday but fell short of the blowout demand
for recent issues amid concerns about its growth prospects in an
increasingly competitive liquor market.
    The IPO, the first by an alcohol company since Sula
Vineyards'  SULA.NS  in 2022, received bids for 924.9 million
shares, worth up to $3.12 billion and about 23 times the 39.4
million shares on offer, exchange data showed.
    In contrast, all the four previous IPOs on the main exchange
this month, including engineering firm DEE Development Engineers
 DEEV.NS , were oversubscribed by around hundred times.
    Most of the bids came in the final hours of bidding on
Thursday, with institutional buyers bidding for 50 times the
shares allotted, while retail investors bid for about four times
the allotment.
    Allied Blenders, which sells 'Officer's Choice' and
'Sterling Reserve' whisky, is going public in a booming Indian
IPO market.
    A total of 129 companies have raised $4.32 billion in IPOs
so far this year, more than double the amount raised by this
time last year, per LSEG data, with the domestic equity market
at an all-time high on the prospect of healthy economic growth.
    Allied Blenders faces stiff competition in India's $33
billion spirits market, including from Radico Khaitan's
 RADC.NS  'Rampur Whisky' and Diageo-owned United Spirits'
 UNSP.NS  'Johnnie Walker' and 'Black Dog'.
    The company's share of the premium portfolio is relatively
lower than its peers, meaning its growth rates may not be that
strong, said Karan Taurani, an analyst at Elara Capital.
    Taurani does not expect the stock to rise much when it makes
its market debut.
    Allied Blenders ranked third in terms of whisky sales in
India in fiscal 2023, according to its prospectus, trailing
United Spirits and 'Chivas Regal'-maker Pernod Ricard  PERP.PA .
    Its core profit (EBITDA) margin is also less peers', Taurani
noted.
    Anchor investors, including domestic mutual funds, had
already subscribed to shares worth 4.5 billion rupees.
    The offer included a fresh issue worth 10 billion rupees,
while co-chairperson Bina Chhabria and vice chairperson Resham
Chhabria Hemdev were seeking to up to 5 billion rupees in stock.
 
 ($1 = 83.5850 Indian rupees)

 (Reporting by Kashish Tandon in Bengaluru; Editing by Savio
D'Souza)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))