Bangalore-based John Distilleries Ltd is close to raising Rs 150-200 crore from private equity firms by diluting 20-25% stake and has appointed JM Financial to seek potential buyers. The company, with a sales of Rs 450 crore, also plans to launch three brands in vodka and brandy segments next month. John Distilleries’ “Original Choice” is one of the largest selling whiskeys in India, with a sales of 10 million cases per annum. The brand has a sales target of Rs 1,000 crore by 2012.
The company, with a strong presence in the country except eastern India, Delhi and Uttar Pradesh, plans to de-leverage its balance sheet with the proposed PE funding and expand in malt, spirits and winery. Speaking to FE, Asif Adil, its vice-chairman and CEO, said, “We plan to use 65% of our proposed PE funding for de-leveraging our balance sheet. The remaining would be utilised equally for capacity as well as marketing expansion.”
The company, which earns 80-85% of its revenues from Original Choice, is aiming at a 10-15% market share in vodka from its proposed “Salute Vodka”, which will compete with major brands Romanov and White Mischief from United Breweries (UB). The India vodka market is around five million cases/annum and UB alone sells about three million.
New brands such as “Grand Duxe Whiskey” will be priced at par with the Bagpiper brand, while its French grape brandy, “Mount Castle” will compete with Mansion House, owned by Tilak Nagar Industries, and priced at around Rs 300. “Though we have a strong presence in southern India, we plan to set up our own sales force in Maharashtra, which is a strong vodka market,” Adil said.