Archian Foods, the force behind the much-loved Lahori Zeera, is on the brink of securing a hefty INR 400-450 crore in funding, spearheaded by Motilal Oswal’s private equity division. This investment could catapult the company’s valuation to between INR 2,500 and 2,700 crore, a tripling from its last assessment, highlighting the booming sector of non-alcoholic ready-to-drink (NARTD) beverages.
Lahori Beverages – Market Expansion
Archian Foods, the parent company of Lahori Beverages, has made significant strides in capturing market share within India’s non-alcoholic ready-to-drink (NARTD) industry. Founded in 2017 by Saurabh Munjal, Saurabh Bhutna, and Nikhil Doda, the company’s journey has been nothing short of remarkable. With products like Lahori Zeera, Lahori Nimboo, and Lahori Shikanji, it has particularly caught on in northern India.
This capital will bolster production facilities, widen distribution channels, and fund aggressive marketing. Currently, Lahori Beverages operates manufacturing units in Punjab and Gujarat, with another in the works in Uttar Pradesh. The expansion plans include increasing daily production capacity from 5 million to over 8 million bottles, alongside introducing new products tailored to regional tastes.
Lahori Beverages – Financials
Financially, Lahori Beverages has shown impressive growth:
- FY21: Revenue at INR 80 crore
- FY22: Revenue at INR 38 crore with a profit of INR 3 crore
- FY23: Revenue soared to INR 215 crore, profit at INR 7.6 crore
- FY24: Revenue reached INR 316 crore, with profits jumping to INR 23 crore
- Projected for FY25: Revenue expected between INR 550-600 crore
The company’s valuation has surged from INR 700-750 crore in 2022 to the current estimate of INR 2,500 crore. Belgian investor Verlinvest, holding a 21.2% stake after a USD 15 million (INR 120 crore) investment, will see some dilution with this new round of funding.
Competitive Landscape
In the competitive landscape, while Coca-Cola and PepsiCo hold sway, Lahori Beverages has found a niche with authentic Indian flavours. The NARTD sector in India, valued at INR 58,000-60,000 crore in 2022, is growing rapidly, with Reliance Industries bringing back Campa Cola to the fray. Lahori Beverages, however, banks on traditional flavours to keep an edge, catering to the trend towards natural and healthier drink options.
Sales predominantly occur through offline retail, accounting for 99% of revenue, with a focus on general and modern trade. While online and quick commerce currently plays a minor role, there’s an ambition to grow in tier-2 and tier-3 cities as digital platforms expand.
Geographically, 75% of sales originate from northern India, but Lahori Beverages is pushing south and east, with eyes on Mumbai and eastern India. International markets are also on the radar, tapping into the global interest in Indian-origin beverages.
Investor interest extends beyond Motilal Oswal to include potential participation from the Abu Dhabi Investment Authority (ADIA) and Peak XV Partners. The funding includes both primary and secondary transactions, with the founders contemplating a partial stake sale to strategic investors.
Despite the heat of competition, Lahori Beverages stands strong with robust profitability, expanding distribution, and consumer demand. The company is eyeing partnerships with retailers and quick commerce platforms to scale sales further.
Conclusion
In conclusion, with Lahori Zeera leading the charge, Archian Foods is set to redefine the beverage landscape in India. The confidence from investors and the company’s growth trajectory spotlight the potential for homegrown brands in this vibrant market. As Lahori Beverages ramps up production, extends its reach, and introduces more regional flavours, it’s poised to hold its own against international giants while offering a taste of authentic India.
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