Shares of Varun Beverages, PepsiCo’s largest franchise bottler, made a tepid debut on the bourses on Tuesday. The stock got listed on NSE at R430, a 3.37% discount to the issue price of R445. However, it ended the session at R461.90 a piece, up 3.79%, on BSE. Post listing, the stock commands a market capitalisation of R8,404.34 crore.
The initial public offering(IPO) of Varun Beverages was subscribed 1.85 times with investors bidding for 3.25 crore shares of the total 1.76 crore shares on offer.
The R1,113-crore offer comprised of a fresh issue of 1.5 crore shares and an offer for sale (OFS) of 50 lakh shares each by promoters Varun Jaipuria and Ravi Kant Jaipuria.
The issue received bids for 2.4 crore shares from Qualified institutional investors or 4.94 times of the 49 lakh shares reserved. Retail investors bid for nearly 0.8 times or 68.49 lakh shares of the 85.75 lakh shares reserved. High-net-worth individuals bid for 15.33 lakh shares of the 36.75 lakh shares reserved for them, bidding 0.42 times.
On October 24, the company raised R327.08 crore from anchor investors by allotting 73,50,000 shares at R445 per share. The anchor investors include Merrill Lynch, Morgan Stanley, American Funds Insurance, Abu Dhabi Investment, Nordea, Wasatch, Small Cap World Fund, Sundaram MF, among others.
The company reported revenues of R3,408 crore for the year ended December 31, 2015, up by 35.4% from the previous year’s R2,517 crore. For the year ending December 2015, the company made a net profit of R87 crore against the previous year’s loss of R20 crore.The company is the franchisee of Pepsico in 17 Indian states. The company produces and sells Pepsico’s brands including Pepsi,Seven-up, Tropicana, Nimbooz among others. The company is also the franchise for Pepsico’s products in Nepal, Srilanka, Morocco, Mozambique, and Zambia.
Kotak Mahindra, Axis Capital, and CLSA India were the global coordinators and book running lead managers (BRLMs) to the issue. Yes Securities was the book running lead manager.