john distilleries india

Indian single malt maker plans 500 crore IPO

Published by The Times of India, India, on Mar 29, 2017.

BENGALURU : India's fifth largest whisky producer John Distilleries Ltd (JDL), the maker of Paul John Single Malt, is planning for an initial public offering (IPO) to raise at least Rs 500 crore, people with direct knowledge of the matter said. IDFC and Axis Bank are being enlisted for the market debut, which would provide an exit for private equity investor Gaja Capital, they added.

Gaja owns 43.57% in the Bengaluru headquartered company in which the founder chairman Paul John controls the remaining shares. The 25 year-old JDL owns the economy priced Original Choice Whisky that sells over 11 million cases and is also the eight largest selling whisky label globally, according to Drinks International. The ingenuously developed Paul John Single Malt, named after the entrepreneur distiller, like its cross-town rival Amrut has revamped the image of Indian whiskys in global markets.

JDL is expected to report Rs 800 crore revenue and Rs 82 crore operating profit in the current fiscal, up from Rs 717 crore and 69 crore respectively in FY16. The brand portfolio, mostly operational in the southern markets, also include Mont Castle brandy, Big Banyan wines. It also exports to the UK, Europe, Africa, the UAE, New Zealand, Australia, the US, Malaysia, Singapore and Taiwan.

Gaja Capital invested Rs 75 crore six years ago and is seeking to sell down a substantial part of the holding through the listing, netting at least a three-fold gain in the process, sources said. Gaja has a track record successful exits through IPOs, including recent blockbusters like RBL Bank and staffing services company Teamlease.

Proceeds from the offering will also be used to expand the company's malt plant, which has a capacity of 1.3 million litres currently. John Distilleries is looking to increase capacity to about 2.6 million litres as it tries to expand its premium single malt brand across the country. The company has eight bottling units spread across seven states including Bengaluru and Davangere in Karnataka.

Meanwhile, JDL has been in discussions with international distillers for a tie-up, which is progressing independent of the listing plans. "The liquor industry today is such that unless one goes for an international tie-up, you do not get the growth pattern. You can get that support through public issue or some foreign tie-ups to bring in some leading brands, which also helps gives technology support, " a source cited above, who declined to be identified, said.

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