Allied Blenders and Distillers (ABD) is turning its focus on expansion and to fund its growth plans. ABD is eyeing Rs 500 crore through private equity tie ups. CNBC-TV-18's Kritika Saxena reports.
Deepak Roy, executive VC and CEO, Allied Blenders and Distillers, who took over as CEO of Allied Blenders and Distillers in 2001 is in high spirits. Over the last 10 years, he has managed to make the company India's third largest liquor firm and is now hunting for private equity players to raise upto Rs 500 crore to fund further expansion.
Roy says, "I can confirm that we have appointed a merchant banker which is Ambit Corporate Finance and Ambit is going to help us raise some private equity funds. We are looking at raising around 500 crore. We need this to grow our existing business, launch new brands and also create some in-house distillation and bottling capacity."
So, what's the growth plan? ADB's flagship brand Officers Choice contributes to over 90 percent of its business. Its growth has helped ABD grow by 14 percent in revenues higher than the industry average of 4 percent. However, other brands like its vodka offering, Class 21 have been struggling and thats what ABD wants to focus on now.
Roy says, "ABD's biggest weakness over the last 3-4 years has been that we are pretty much one and a half brand company. We are not represented in every segment in the market, so the plan is now to A-premiumise the portfolio and have a representation in almost all the segments."
But with the Diageo and United spirits deal done the industry seems to be gearing up for consolidation, not to mention more competition. Roy, who has in the past worked for both UB Group and Diageo, however appears unperturbed. Roy says, "Both these are multinational deep pockets and I think consolidation will help us. So we will be happy to look at driving some kind of consolidation."
In fact, some analysts say, further consolidation and growing brand consciousness could ultimately turn the liquor industry into a big boys' game. But for now the immediate challenge is the lack of regulatory clarity in the sector which has kept pricing of products on an unsure footing.
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