Allied Blenders and Distillers Ltd is a Mainboard IPO with a book-built issue of Rs. 1500 crores, consisting of a fresh issue of 3.56 crore shares and an Offer for Sale (OFS) of 1.78 crore shares. The IPO is scheduled to be open for subscription from 25th June 2024 to 27th June 2024. Allotment of shares is expected to be completed on 28th June, and the listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) is planned for 2nd July 2024. The price band for the IPO is ₹267 to ₹281 per share, with a minimum lot size of 53 shares and a minimum investment amount of ₹14,893. The book-running lead managers for the IPO are ICICI Securities Ltd, Nuvama Wealth Management Ltd, and ITI Capital Ltd. Link Intime India Pvt Ltd is the registrar for the issue.

The net proceeds from the issuance of 35,587,189 Equity Shares (worth Rs 1000 crs) will be used to prepay or schedule a portion of certain outstanding borrowing and other general corporate purposes.

Allied Blenders and Distillers (ABD) is the largest Indian-owned company in the Indian Made Foreign Liquor (IMFL) industry and the third-largest overall. They hold an 11.8% market share in the Indian Whisky market in terms of sales volumes as of FY23. The company's flagship brands include Officer’s Choice Whisky, Sterling Reserve, Officer’s Choice Blue, and ICONiQ Whisky. ABD’s products are available in 79,329 retail outlets across 30 States and Union territories in India, and they are also exported to 14 international markets, including countries in the Middle East, North America, Africa, Asia, and Europe.

Strengths

• ABD has well-established brands such as Officer’s Choice Whisky, Sterling Reserve, Officer’s Choice Blue, and ICONiQ Whisky, which are the ‘Millionaire Brands’. Further, the company recently launched the Zoya Special Batch Premium Gin in January 2024.

• It has a pan-India sales and distribution footprint, retailing products in 79,320 retail outlets in 30 states and union territories. In addition to the Indian market, the company exports to 14 international markets, including the Middle East, North America, Africa, Asia, and Europe.

• The company operates its own distillery in Rangapur, Telangana, which has an in-house capacity of extra neutral alcohol (ENA) of 600 Lakh liters per year. It also has access to 32 bottling facilities, of which 9 are owned and operated by the company.

Weaknesses

The following points should be kept in mind:

• As of 9MFY24, 94.33% of the revenues are from whisky products, and 73.03% of the sales volumes are dependent on products under the Officer’s Choice Brand, which showcases a product concentration risk.

• The company’s margins are lower than the peers, leading to poor return ratios.