Varun Beverages own 90% of Zambian subsidiary
Varun Beverages Ltd, the largest bottler for PepsiCo in India, has increased its stake in its Zambia subsidiary to 90% to benefit from fast-paced growth in the African nation. Without disclosing details of the transaction, the company told SEBI in a stock-exchange filing that previously it held a 60% stake in Varun Beverages (Zambia) Ltd, which sold 10.7 million cases last year.
Varun Beverages is one of PepsiCo's biggest franchisee, and has their major business with carbonated soft drinks and non-carbonated beverages. The company sells their beverages under the PesiCo trademarks across the world. It has a diversified line-up of production, with popular brands such as Seven-Up, Mirinda, Diet Pepsi, and Tropicana. It also holds the franchise for the drinking water brand Aquafina.
Varun Beverages files for IPO
Varun Beverages, promoted by RJ Corp, filed for its IPO debut with the Securities and Exchange Board of India (SEBI) in June this year. The company filed with the board its red herring prospectus, or its preliminary prospectus. Varun Beverages pitched to be the world's second biggest PepsiCo bottler, is run under billionaire Ravi Jaipuria's RJ Corp.
Varun Beverages' investors
The beverage company has investors such as Standard Chartered Private Equity and Aion Capital Partners under its belt. The company currently has operations across India, Africa and South Asia, with nearly 20 bottling plants in these countries.
SEBI approves Varun Beverages' IPO filing
Earlier this month, the Securities and Exchange Board of India, which serves as the regulatory body for the securities market, approved Varun Beverages' IPO filing. Reports stated that the approval came through on 31 August. The company has roped in Kotak Mahindra Capital Company, Axis Capital, CLSA India and YES Securities India as financial advisors for the IPO.
How are the company's financials placed?
Varun Beverages has clocked massive revenues, which rose nearly 35.41 percent to touch Rs.3408 crore last year. Its profits were said to be Rs.87.04 crore last year, compared with a net loss amounting to Rs.20.16 crore in 2014.
Varun Beverages' IPO looks to raise Rs.1,400 crore
Varun Beverages said that the company is looking to raise nearly Rs.1,400 crore through its IPO, which is scheduled to complete by end of October. The IPO will see around 15 million new shares on offer, and around 10 million shares of the Jaipuria family for sale. The company said that after the IPO, its debt-to-equity ratio will decrease to 1 from 2.
Market experts bet big on consumer stocks
"Investors are willing to bet on the India consumption story and are keen on investing in consumer stocks, but the interest is not across all categories of consumer sector",said Dhanraj Bhagat, Partner, Grant Thornton India LLP.
Varun Bevarages IPO subscribed 1.84 times
Varun Bevarages, the world's second largest franchisee of PepsiCo, saw its IPO subscribed 1.84 times on the final day. Stock exchange data showed the institutional investors category was subscribed 4.94 times, while high net-worth individuals and retail investors were subscribed 0.42 times and 0.79 times respectively. Analysts predict that at the upper limit, the company could raise over Rs.1100 crore for its IPO.