Sula Vineyards, India’s largest wine producer, goes public

Sula Vineyards, the largest producer of wines on the Indiawent public on Monday with an initial public offering aimed at raising about 9.6 billion rupees (about $116 million) by Wednesday.

The company, which controls 52% of the wine market in India, will make available to the promoters and current shareholders of the company up to 26.9 million shares at a price ranging between 340 and 357 rupees (US$ 4.1 – US$4.3).

As of its close this afternoon, investors had bought some 5.2 million shares of Sula Vineyards, representing 19% of the total shares offered, the Bombay Stock Exchange reported on its website.

After a drop in profits of more than 20% during the COVID-19 pandemic, the winery company showed the first signs of recovery in fiscal year 2022, with close to US$ 52 million in net income, 6.5% less than in fiscal year 2020, the last before the health emergency, according to a report from the Indian bank ICICI.

Sula Vineyards is the great dominator of the emerging wine market in the Asian country, with the capacity to manufacture 14.5 million liters annually, also benefiting from the high alcohol import rates in India, of 150%, Being able to offer more competitive prices.

This company also exports to more than 20 countries on four continents.

And it is that it has more than 1,000 hectares of vineyards in the western states of Maharashtra and Karnataka, compared to the 186 cultivated hectares presented by the second wine company in the country.

sector on the rise

Despite the fact that wine consumption in India is still very far from other countries, as this drink represents only 1% of the alcohol consumed in the Asian country compared to the world average of 13%, It is a rising industry according to several reports.

The Indian Ministry of Commerce and Industry highlighted a 14% annual growth of the sector between 2010 and 2017, while the ICICI report showed a growth of 18.3% between 2014 and 2019.

Thus, this industry reached a value of 19,000 million rupees (around US$ 230 million) in fiscal year 2020, which is estimated to rise to 37,850 million rupees (more than US$ 450 million) at the end of the fiscal year. 2025.

This growth responds to the increase in demand for wines in urban and semi-urban areas of India, which will cause it to go from producing 2.6 million boxes of wine this year, to some 3.9 million boxes in 2025, explained the ICICI.

But the increase in wine consumption in this country of 1.4 billion people will not be an isolated event, but will involve all other alcoholic beverages, including spirits, the most consumed type of alcohol in India.

India is currently the world’s third largest market for alcoholic beverages, exporting more than 247,000 tons of alcoholic products worth US$322.12 million during fiscal year 21, the Indian Ministry of Commerce and Industry said in a communicated last month.

The main export destinations for these products were the United Arab Emirates, Ghana, Singapore, Congo and Cameroon, he said.

(With information from EFE)