MUMBAI, 13 DECEMBER, 2022 (GPN): Sula Vineyards Limited the country’s largest wine producer and seller and a market leader in the Indian wine industry in terms of sales volume and value since Fiscal 2009 has received bids of 52,34,670 shares against the offered 1,88,30,372 equity shares, at a price band of ₹340-357, according to the data available on the stock exchanges. Overall the issue was subscribed 0.28 times on the first day of bidding.
Retail Portion was subscribed the most i.e 0.48 times followed by Non-Institutional segment that saw a response of 0.18 times. The reserved portion for qualified institutional buyer portion are yet to receive any bids. The issue kicked off for subscription on Monday, December 12, and will close on Wednesday, December 14, 2022.
Sula Vineyards Ltd raised Rs 288 crore from anchor investors including Abu Dhabi Investment Authority, Goldman Sachs, New York State Teachers Retirement System, Ashoka India Equity Investment Trust PLC, Jupiter South Asia Investment Company Ltd, Segantii India Mauritius, Morgan Stanley Asia, Citigroup Global Markets, and BNP Paribas Arbitrage ODI and in addition, shares have been allocated to domestic funds i.e Aditya Birla Sun Life Mutual Fund, HDFC Small Cap Fund, SBI Mutual Fund, ICICI Prudential Life Insurance, HDFC Life Insurance, Aditya Birla Sun Life Insurance, and Max Life Insurance.
Broking houses like Canara Bank Securities, Choice Equity Broking, Anand Rathi Shares and ICICI Direct, Ventura Securities have given a “Subscribe” rating to the issue
Sula is a pure play on the wine sector, which currently has a low base (less than 1% of alcobev industry) but is expected to surpass industry growth due to higher acceptability, affordability, perceived health benefits, etc. In addition, considering the higher share of high margin segments in the revenues and focus on owned brand, the company would be able to expand its margin going forward. Its strong position in a high barrier and fast growing segment would help it to gain further in terms of sales in the long run.
At higher price band, Sula has a P/E multiple of 38.5x (to its TTM earnings), which is in-line with the to the peer average. It has a low wine penetration in the domestic market and with expanding demographic factors like rising per capita income and expanding target population, will fuel growth. Sula being the largest producer & seller of wine is well placed to capture the future growth opportunities in the Indian wine market.
Kotak Mahindra Capital Company Limited, CLSA India Private Limited and IIFL Securities Limited are the book running lead managers and KFin Technologies Limited is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
Company Information
Sula set up its first vineyard in 1996 and in the year 2000 was the first to introduce varietal wines in India with the launch of Sauvignon Blanc, Chenin Blanc, Zinfandel, Riesling, Red Sparkling, and dessert wine offerings. In Fiscal 2005 it launched the first wine tasting room in India at its winery in Nashik, Maharashtra followed by country’s first vineyard resort in 2008, and in the same year, the wine-maker launched the first wine-themed music festival in India, “SulaFest”, at its Nashik facility in 2008. “SulaFest” has been widely recognized as the largest wine music festival in India and one of the largest wine music festivals in Asia, based on attendance. In Fiscal 2017, it launched a wine tasting room at its “Domaine Sula” facility in Karnataka.
The Mumbai-based wine maker is one of the fastest growing alcoholic beverage companies in India as of March 31, 2021 and has grown at a CAGR of 13.7% between Fiscals 2011 and 2021 according to Technopak report as mentioned in the RHP. On the basis of total revenue from operations, it has gained market share from 33% in Fiscal 2009 in 100% grapes wine category to 52% in value in Fiscal 2020 and further increased to 52.6% in Fiscal 2021. Its business can be broadly classified under production of wine, import & distribution of wines and spirits and sale of services from ownership and operation of wine tourism venues including vineyard resorts and tasting rooms.
The table below shows subscription data for all the categories of investors:
| SULA VINEYARDS LIMITED
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| Sr.No. | Category | No.of shares offered / reserved | No. of shares bid for | No. of times of total meant for the category |
| 1 | Qualified Institutional Buyers (QIBs) | 53,80,106 | – | 0.00 |
| 1(a) | Foreign Institutional Investors (FIIs) | – | – | – |
| 1(b) | Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies) | – | – | – |
| 1(c) | Mutual Funds | – | – | – |
| 1(D) | Others | – | – | – |
| 2 | Non Institutional Investors(NIIS) | 40,35,080 | 7,34,958 | 0.18 |
| 2.1 | Non Institutional Investors(Bid amount of more than Ten Lakh Rupees) | 26,90,053 | 4,31,928 | 0.16 |
| 2.1(a) | Corporates | – | 4,200 | – |
| 2.1(b) | Individuals (Other than RIIs) | – | 4,19,286 | – |
| 2.1(c) | Others | – | 8,442 | – |
| 2.2 | Non Institutional Investors(Bid amount of more than Two Lakh Rupees and upto 10 lakh rupees) | 13,45,027 | 3,03,030 | 0.23 |
| 2.2(a) | Corporates | – | 588 | – |
| 2.2(b) | Individuals (Other than RIIs) | – | 2,87,826 | – |
| 2.2(c) | Others | – | 14,616 | – |
| 3 | Retail Individual Investors (RIIs) | 94,15,186 | 44,99,712 | 0.48 |
| 3(a) | Cut Off | – | 40,76,436 | – |
| 3(b) | Price Bids | – | 4,23,276 | – |
| 4 | Employee Reserved | – | – | – |
| 4(a) | Employee (Cut off) | – | – | – |
| 4(b) | Employee (Price) | – | – | – |
| 5 | Reservation PortionShareholder | – | – | – |
| 5(a) | RPS (Cut off) | – | – | – |
| 5(b) | RPS (Price) | – | – | – |
| Total | 1,88,30,372 | 52,34,670 | 0.28 | |
BSE + NSE Cumulative Demand Live Link: https://www.bseindia.com/markets/publicIssues/CummDemandSchedule.aspx?ID=5956&status=L
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