InvestorQ : What are the specifications of the proposed IPO of Sula VIneyards
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What are the specifications of the proposed IPO of Sula VIneyards

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4 weeks ago
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Sula Vineyards, which is India’s largest brewer of domestic wines has filed the draft red herring prospectus with SEBI for its proposed IPO or initial public offer. It is likely to be the first IPO by a pure play wine company. Earlier, another company in the spirits business, Allied Blenders & Distillers filed its DRHP (draft red herring prospectus) last month. Sula is located in the grape growing region of Nashik in Maharashtra and will entirely be an offer for sale (OFS). The Belgian family office, Verlinvest, has been a early backer of Sula.

As part of the OFS, Verlinvest and the promoter group are amongst the major selling shareholders. The total OFS size is likely to be 25,546,186 or approximately 25.546 million equity shares. Sula has been one of the pioneers in this business in India and has been a profitable venture for a long time. Apart from running the vineyards, it also offers luxury tourism at its various sites. The IPO will be managed by Kotak Mahindra Capital, CLSA and IIFL Capital and they will also act as the book running lead managers to the issue.

Currently, Sula has 2 manufacturing units. While one such unit is located in Nashik, the other one is located in Bengaluru. As per last reports, it had a total production capacity of over 13 million litres. Out of the total capacity, 11 million litres is based out of Nashik and 2 million litres is housed in Bengaluru. Sula currently offers a total of 56 domestic labels under 13 brands fall into segments like Elite, Premium, Economy and Popular; based on their price, composition, taste and alcohol content. It is focusing more on premiumisation of portfolio.

In addition to the Sula wine production activity, the company also gets revenues from the hospitality segment via its 2 wine resorts; Beyond Sula and the Source at Sula. It also has full-fledged dealership agreements with international brands such as Le Grand Noir, Hardys, Beluga Vodka etc, wherein Sula acts as the distributor. This enables Sula to leverage its existing network to sell other products and also offers interesting moments to push the sales of wines, which is yet to take off in India as a form of social drinking.

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