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) |
|||||
| Â | 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 LtdÂ
Plot No. 31, Institutional Area,
Sector 44, Gurgaon 122002
Phone:Â +91 124Â 464 3100
Fax:Â +91 124 464Â 3303
Email: [email protected]
Website: www.varunpepsi.com
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: [email protected]
Website: http://karisma.karvy.com
Varun Beverages IPO Subscription Details
| Category | Shares offered | Subscription (no. of times, at 6Â PM)Â | ||
| Day 1 | Day 2 | Day 3 | ||
| QIB |
4,900,000 |
0.87 |
 2.94 | 4.93 |
| NII |
3,675,000 |
0.18 |
0.21 | Â 0.41 |
| Retail |
8,575,000 |
0.11 |
0.31 | Â 0.81 |
| Employee |
500,000 |
0.00 |
 0.02 |  0.05 |
| Total |
17,650,000 |
0.33 |
1.01 | Â 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:Â 4 November 2016
Transfer of shares to demat accounts:Â 7 November 2016
Listing Date:Â 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)
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.
Haha, the noble soul he is, Sinha ji is quick to correct himself.
Zero, no grey market trades.
@Sinha ji, you seem to have some insider information. Should I put a small application?
Happy Diwali to everyone 🙂
420 listing prize
i do not no