Varun Beverages, second largest bottler of PepsiCo, filed a draft prospectus on Wednesday with the Securities and Exchange Board of India for an Initial Public Offer (IPO) of equity.
The launch is slated later this year. The IPO, likely to be over Rs 1,000 crore, will be the second fund raising in a year. In October 2015, Varun had raised Rs 600 crore from Singapore-based Aion Investments, part of which it said would be utilised for refinancing debt and for expansion of its business.
Aion had pumped Rs 300 crore into Varun for this purpose, with the rest used to acquire compulsorily convertible debentures from existing investors, including Standard Chartered PE. Varun had raised Rs 400-450 crore in two tranches from Standard Chartered PE, in 2011 and 2012, respectively.
The stakeholding of both Standard Chartered and Aion was not disclosed at the time of raising funds. It is unclear whether the two investors will divest stake during the IPO, though the promoter, Ravi Jaipuria, is expected to dilute his share holding.
Kotak Mahindra Capital, Axis Capital and CLSA India are merchant bankers to the public issue. Roadshows are expected to commence after the draft prospectus is cleared.
Varun wishes to consolidate its position as one of PepsiCo’s lead bottling partners. In November 2014, PepsiCo had divested its entire North India bottling operations to Varun, in a move intended to limit its exposure to production. Varun also handles bottling operations in the eastern part of India, barring Bihar.
Additionally, Varun, whose estimated annual revenue is Rs 4,000 crore, has operations in Nepal, Sri Lanka, Zambia, Morocca and Mozambique. It has 22 bottling plants in India and abroad.