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May 14, 2024

Allied Blenders Ltd Receives SEBI Approval for Rs 1,500-Crore IPO

Allied Blenders and Distillers Ltd, the renowned maker of Officer’s Choice Whisky, has secured the green light from the Securities and Exchange Board of India (SEBI) to launch an Initial Public Offering (IPO) worth Rs 1,500 crore. This significant milestone was confirmed in an update from the markets regulator on Tuesday.

The IPO will feature a fresh issuance of equity shares amounting to Rs 1,000 crore and an Offer-for-Sale (OFS) of shares worth Rs 500 crore by the company’s promoters, as detailed in the Draft Red Herring Prospectus (DRHP). Key promoters, including Bina Kishore Chhabria, Resham Chhabria Jeetendra Hemdev, and Neesha Kishore Chhabria, are set to participate in the OFS.

Allied Blenders and Distillers Ltd, which initially submitted its IPO documents to SEBI in January, received the regulator’s observations on May 10. In SEBI’s terminology, obtaining observations signifies approval to proceed with the public issue.

According to the draft documents, the proceeds from the fresh issuance will primarily be allocated towards debt repayment, with Rs 720 crore earmarked for this purpose. The remainder will be utilized for general corporate activities. As of December 2023, the company’s total debt stood at approximately Rs 808 crore.

Holding a substantial market share of over 8 percent in the Indian-Made Foreign Liquor (IMFL) market by sales volume in Fiscal 2023, Allied Blenders and Distillers had previously attempted to launch a Rs 2,000 crore IPO in 2022. Although SEBI had approved this earlier attempt, the company chose not to proceed with the offering at that time.

Allied Blenders and Distillers is a prominent player in the manufacturing, marketing, and sale of alcoholic beverages both domestically and internationally. Its product lineup includes a variety of IMFL brands across different categories such as whisky, brandy, rum, and vodka. Notable brands under its portfolio include Officer’s Choice Whisky, Sterling Reserve Whisky, Jolly Roger Rum, and Class 21 Vodka.

In a related development, Chhattisgarh-based Vraj Iron and Steel has also received SEBI’s nod to initiate its IPO. The planned IPO involves a fresh issue of shares worth Rs 171 crore, with no OFS component. Vraj Iron and Steel submitted its draft IPO papers in January and received SEBI’s observations on May 7.

The equity shares of both Allied Blenders and Distillers Ltd and Vraj Iron and Steel are proposed to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), promising greater visibility and liquidity in the market for these firms.

With SEBI’s approval, Allied Blenders and Distillers is poised to strengthen its financial position, primarily by reducing its debt burden. This strategic move is expected to enhance the company’s operational capabilities and support its growth ambitions in the competitive IMFL market. Investors and market watchers are keenly awaiting the launch, which is set to be a significant event in the Indian financial markets.

This IPO not only marks a pivotal moment for Allied Blenders and Distillers but also reflects the growing confidence in the Indian alcoholic beverage sector, driven by robust demand and evolving consumer preferences. As the company gears up for its public debut, it aims to capitalize on its strong market presence and diverse product portfolio to attract a broad spectrum of investors.

Jhumpa Lahiri

Jhumpa Lahiri

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