Varun Beverages IPO

Varun Beverages Logo Varun Beverages is one of the largest franchisees in the world of carbonated soft drinks and non-carbonated beverages sold under trademarks owned by PepsiCo. The company produces and distributes a wide range of beverages under the Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Seven-Up Revive, Evervess, Tropicana Slice, Tropicana Frutz (Lychee, Apple and Mango), Nimbooz, and Aquafina brands.

Thanks to Varun Beverages’ nearly 26 years of relationship with PepsiCo, it has also been granted the franchise for various PepsiCo products in Sri Lanka, Morocco, Mozambique and Zambia. In addition, it is setting up a greenfield facility in Zimbabwe in anticipation of franchise rights by PepsiCo.

India continues to remain the largest market for Varun Beverages, contributing 84.38% of its revenues from operations in FY2015.

As of April 30, 2016, Varun Beverages operated 16 production facilities across India and five production facilities in international licensed territories. Its distribution network in India included 57 depots and 1,389 delivery vehicles while it operates 6 depots and 342 delivery vehicles in international markets. As of December 2015, Varun Beverages had 578 primary distributors (which had FY2015 sales in excess of 0.5 million litres of PepsiCo beverages) in India and 244 distributors in international operations. The 578 primary distributors in India accounted for 76.79% of its aggregate sales volumes in India in FY2015.

Promoter of Varun Beverages: RJ Corp Limited, Ravi Kant Jaipuria, Varun Jaipuria and Ravi Kant Jaipuria & Sons (HUF)

Varun Beverages IPO details
Subscription Dates 26 – 28 October 2016
Price Band INR440 – 445 per share
Fresh issue 15,000,000 shares
Offer For Sale 10,000,000 shares
Total IPO size 25,000,000 shares (INR1,112.5 crore at upper band)
Minimum bid (lot size) 33 shares
Face Value  INR10 per share
Retail Allocation 35%
Listing On BSE, NSE

Varun Beverages’ consolidated financial performance (in INR crore)

  FY2012 FY2013 FY2014 FY2015 H1 FY2016
Total revenue 1,844.1 2,132.5 2,517.1 3,408.4 2,539.3
Total expenses 1,823.3 2,178.1 2,513.3 3,246.2 2,226.2
Profit after tax 25.1 -39.5 -20.1 87.0 209.7

Varun Beverages Ltd 
Plot No. 31, Institutional Area,
Sector 44, Gurgaon 122002

Phone: +91 124 464 3100
Fax: +91 124 464 3303
Email: [email protected]

Karvy Computershare Private Limited
Karvy House, 46, Avenue 4, Street No. 1,
Banjara Hills, Hyderabad – 500 034
Andhra Pradesh, India

Phone: +91 40 23312454
Fax: +91 40 23311968
[email protected]

Varun Beverages IPO Subscription Details

Category Shares offered Subscription (no. of times, at 6 PM) 
Day 1 Day 2 Day 3



 2.94 4.93



0.21  0.41



0.31  0.81



 0.02  0.05



1.01  1.85

Varun Beverages IPO allotment status will be available on available on Karvy Computershare’s website. Click on this link to get allotment status. You can also check allotment status using application number on this link.

IPO Opening Date: 26 October 2016

IPO Closing Date: 28 October 2016

Finalisation of Basis of Allotment: 3 November 2016

Initiation of refunds: 4 November 2016

Transfer of shares to demat accounts: 7 November 2016

Listing Date: 8 November 2016

Listing Price on NSE: INR430 per share (Loss of 3.3% on IPO price)

Closing Price on NSE: INR456.8 per share (Profit of 2.6% on IPO price)


  1. Biggest bottler and loss in two years??? Not even even worthy of any premium in grey market. Just my opinion, no need to get offend anyone

  2. Doesn’t look good. Such a big name and v poor results. I’m not going for it although applications trading at 35-40 gmp.

  3. And don’t fall in the trap in Varun beverages. No or very little grey market trading in Varun. IPO price around 600, Flop IPO, STAY AWAY.

    • Why do you say it flop ipo without knowing price. ARe you sure the price will be 600??? It will be good just like manpasand ipo. Peopl called that also expecensive and just look at the price now.

      • Because I have seen their books. There is no way one can sell shares at such valuations (even at 400, the PE ratio is 62, chk prospectus pg 106) with such low margins (less than 3% in 14-15). Varun may be biggest bottler of Pepsi but that means nothing if the company is not profitable for two in the last four years.

        Frankly, comparison with Manpasand is laughable. Manpasand is a strong and growing brand and keeps all its profits, Varun works as a contractor for Pepsi so obviously Pepsi takes most of the profits. Just read more about Manpasand and you will see how fast it is growing. Varun beverages growth is decent but nothing when compared to Manpasand.

  4. Correct me if i am wrong, but isn’t the low margins and losses in the two of the last 4 years largely due due to to interest and depreciation, which is result of large scale expansions ? In IPO will dilute interest costs, and new expansions will result in better bottom lines,
    Also i understand the Per capita consumption of soft drinks in India is even lower than Pakistan as of today, leaving huge path for grown in even the short to medium time span.

    • You have some good points. Here are some thoughts – interest costs will come down, depreciation will not. Expansions work best when plants run at max capacity and India may never have soft drink consumption per capita close to US. Cold drinks were fashionable 5-10 years back but old now. IMO, Varun is late in the game, they could have received valuations like Jubilant Food earlier but not now.

      • Plus the entire industry might see a lot of headwinds due to very high “demerit” taxes as part of the new GST roll out. They are planning to tax sugary drinks at about 40% with Coke saying they might be shutting factories in India if that happens.

        • Good point Navneet but I’m not sure cold drinks can be taxed at 40%. It is difficult to prove cold drinks are fit for ‘sin tax’, tobacco products are easy targets. Even most public will happily agree on 40% tax on tobacco and alcohol drinks. What I fear the most is that this government can tweak and change rules to benefit Baba Ramdev.

  5. Let me correct myself. My earlier remarks were based on IPO price of 600

    Six month diluted EPS (post conversion) 13.69 (source RHP, page 113). Their first half is stronger than the second half for the simple reason that India is a hot country. Simple annualization EPS comes around 23-24. This means the IPO is priced at a PE ratio of 18-19. Not bad, am still going through prospectus.

      • Yes, because the IPO price is less that earlier forecasts and the company had better results in 6 months. I know it raises suspicion that books are cooked but Im now happy to take a chance. It will be oversubscribed for sure so will get just one lot. I’m happy to hold if it lists lower, I believe the downside is limited now.

        And this is not a recommendation. It suits my risk profile, may not be the case with you. If you want assured returns, mutual funds or fixed deposits are good bets (no pun intended).

    • Sinhaji, why this suspense. Please tell directly. I find this IPO interesting and agree with Krishna’s analysis here but worried that the price is high so listing profits not guaranted.

  6. All those ppl saying no investors in Varun, mind that the ipo is fully subscribed on the second day. Figure out what will happen tomorrow.

  7. Deep correction in the market, all IPOs will be in loss or very small profit from here. Be cautious, it is your own money so take care yourself.

  8. Pleased with decent listing. Now all the ppl claiming it will be a disaster are quiet. I’m waiting to make 20% return on my application


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