Allied Blenders IPO Review

 Allied Blenders and Distillers is an Indian-made foreign liquor company. The company offers Indian-made foreign liquor categories: whisky, brandy, rum, and vodka. Allied Blenders IPO is planning to raise Rs 1,500.00 crores. The issue is a combination of fresh issue of 3.56 crore shares aggregating to Rs 1,000.00 crores and offer for sale of 1.78 crore shares aggregating to Rs 500.00 crores.

IPO opensJune 25, 2024
IPO ClosesJune 27 2024
IPO Size (Rs.)  ₹1,500.00 Cr
IPO Size (shares)53,380,783 shares
BreakupFresh issue ₹1,000.00 Cr+ OFS  ₹500.00 Cr
Face Value:₹ 2
IPO Price in Rs :₹267 to ₹281 per share
Minimum Lot53 Shares
Listing AtNSE BSE
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerICICI Securities, Nuvama Wealth Management and ITI Capital  
RegistrarLink Intime

About Allied Blenders and Distillers Limited :

  • Incorporated on October 8, 2008
  • Allied Blenders and Distillers is the largest Indian-owned Indian-made foreign liquor company and the 3rd largest IMFL company in India, in terms of annual sales volumes between Fiscal 2014 and Fiscal 2022 and had estimated market share for Fiscal 2023.
  • Their product range includes 5 main categories: Whisky, Brandy, Rum, Vodka and others.
  • Company’s flagship brand, Officer’s Choice Whisky was launched in 1988 with their entry into the mass premium whisky segment. Officer’s Choice Whisky has been among the top selling whisky brands globally in terms of annual sales volumes between 2016 and 2019. Officer’s Choice Whisky including Officer’s Choice Blue is currently ranked 3rd among the largest selling whisky brands globally in 2021
  • As of December 31, 2023, their product portfolio comprised 16 major brands of IMFL across whisky, brandy, rum and vodka.
  • Their whisky brands include blends of Scotch malts from the Highland, Lowland and Speyside regions.
  • The company owns and operate their distillery located in Rangapur, Telangana.
  • Their network includes 1 owned distillery, 9 owned bottling units and 23 non-owned manufacturing units.
  • As of March 31, 2023, their products were retailed across 79,329 outlets in India.

Financials: Allied Blenders and Distillers Limited

Particulars/ Rs (in crore)2023(09)2022(09)2023(12)2022(12)2021(12)
Revenue from Operations5,911.145,389.047,105.687,196.926,378.78
Revenue Growth (%)9.69%-1.27%12.83%
EBITDA as stated186.2145.81196.06207.55213
EBITDA Margin (%)7.27%6.14%6.23%7.73%9.07%
Net Profit4.232.881.61.482.51
Net Profit (%)0.17%0.12%0.05%0.05%0.11%
Share Capital48.8248.8248.8247.1147.11
Net Worth as stated409.26407.08406.1404.1381.78
EPS – Basic & Diluted (₹)
ROE (%)1.03%0.71%0.39%0.37%0.66%
ROCE (%)24.35%18.80%25.87%25.13%26.45%
NAV (₹)16.7616.6816.6416.5515.75
Net Debt / Equity1.881.891.852.052
Post issue Share Capital55.94
IPO price281.0
EPS Fy230.1
PE Fy234,912.2
EPS Fy24 (annualized)0.2
PE Fy24  (annualized)1,393.5
Market cap in Lacs7,860
Market cap / Sales1.11

Anchors: Allied Blenders and Distillers IPO

Allied Blenders collected ₹499.1 Crore through the anchor book. The anchor book included investors like Societe Generale, Goldman Sachs, Troo Capital, BNP Paribas, 360 One Special Opportunities Fund, LIC Mutual Fund, and Jupiter India.

Allied Blenders IPO: Salient Points

  • With OFS of Rs. 500 cr by the promoter stake will 100% stake will drop to 81%.
  • The net fresh issue proceeds are primarily to settle debts, as well as for general business objectives. From IPO proceeds they will repay Rs. 720 cr of Rs.798 cr gross debt on their books.
  • This is company’s second attempt at IPO after a 2 year gap.
  • The company has various well-known brands like Officer’s Choice Whisky, Sterling Reserve, Officer’s Choice Blue.
  • They are the largest Indian owned IMFL company. They are the 3rd largest IMFL company in India with 4 of their brands being ‘Millionaire Brands’
  • The company has built a well-recognized product portfolio of multi-product, multi-brand firm with a presence across various categories and segments of the IMFL industry in India.
  • Peers: Revenue growth has been lower than peers and is yet to touch Pre covid levels. So have the Profit margins. With reduction in debt it may report PE of around Rs. 70 next year. Listed peers such as United Spirits trades at P/E of 65. Others like Radico Khaitan trades at P/E of 96x and Globus Spirits trades at P/E of 23.3. Only parameter on which it is comfortable is Macp/sales multiple of 1.0x which is lower than peers.
  • Allied Blenders IPO is coming at a PE ratio of 1400x (fy24 earnings annualized). This should improve a lot after planed debt reduction.
  • I may apply in Allied Blenders IPO purely as a risky bet for listing gains. Industry is expected to do well though valuations being demanded are quite high.
  • GMP reported in social media is about Rs. 75 (25%).
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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