Carlsberg considering IPO for Indian arm, in talks with investors
What's the story
Danish brewing giant Carlsberg A/S is said to be mulling an initial public offering (IPO) for its Indian subsidiary. The company has started preliminary talks with potential advisors, according to Moneycontrol. Investment banks such as BofA Securities, Citi, Deutsche Bank, JPMorgan, and Morgan Stanley have been approached this month to pitch their services for the proposed listing.
Strategic move
Discussions are in early stages
The decision to explore an IPO comes after two years of deliberation. One source said that "the attractive multiples here are one of the key drivers" behind this strategic move. However, it's important to note that these discussions are still in their early stages and no final decisions have been made regarding the size or valuation of a potential listing.
Financial growth
Strong business performance in FY24
The potential IPO move comes on the back of Carlsberg India's strong business performance. The company recorded over ₹8,000 crore in revenue for FY24 and a 60% jump in profits to ₹323 crore. Carlsberg's portfolio in India includes popular brands like Carlsberg Green, Carlsberg Elephant, Tuborg Green, Tuborg Strong, and Tuborg Classic, among others.
Market strategy
Carlsberg's competitive landscape in India
With seven operational breweries in India, Carlsberg competes with listed peers such as United Breweries (owned by Dutch major Heineken) and global giant AB InBev. The company recently launched its first IT Global Capability Center in Gurugram to strengthen its presence in India. According to Carlsberg's 2024 annual report, India is a key growth market for the group with a market share of around 21%.
Strategic acquisitions
Consolidation of operations between India and Nepal
In its 2024 annual report, Carlsberg also highlighted the consolidation of operations between India and Nepal. The company acquired CSAPLH's 33% stake in CSAPL and an additional 9.94% stake in Gorkha Brewery last year. Post-acquisition, Carlsberg now owns 100% of the Indian business and 99.94% of the Nepalese business, enabling it to accelerate investments in India for capacity expansion, brand portfolio development, and distribution increase.