Allied Blenders eyes Rs 200 cr PE funding

Leading spirits company Allied Blenders & Distillers (ABD) plans to adopt the private equity route to raise Rs 200 crore in the next 18 months to fuel its expansion ambitions, a top company official said.

The company -- in which Kishore Chhabria and Deepak Roy own a 95% and 5% stake, respectively -- could dilute up to 10% stake for the purpose, he said.

"We are likely to raise Rs 200 crore in the next 18 months through the PE route. The money will be used to propel our expansion," ABD Executive Vice-Chairman & CEO Deepak Roy told PTI here.

The company, which makes the popular Officer's Choice whiskey and Gorbatschow vodka, is willing to dilute up to 10% stake, he said, without disclosing further details. "Much would depend on the valuation we get. Things are still in the thought-process stage -- it will take us sometime to get cracking on this," he said.

The company plans to use the funds to set up at least three more bottling units, besides building up its distillation capacity.

In another strategy shift, ABD plans to reduce its heavy dependence on Officer's Choice whiskey, which presently contributes 92% to its total sales volumes.

"We plan to increase the contribution of our other products, such as vodka, rum, brandy and even whiskey, in different segments over the next three years. By then, Officer's Choice whiskey's share of sales volume should be around 75%," Roy said.

There will be no defocus on Officer's Choice -- it will grow, but the company would be growing its other products faster, he explained.

The company plans to utilise the funds raised through private equity to create distillation capacity.

"We want to create distillation capacity -- we now buy spirits, which makes us vulnerable to price increases or shortages. We want to have at least a 30% distillation capacity in-house in the next two years," Roy said.

Similarly, it wants to enhance its in-house bottling capacity to 70% from the present 28%. "In three years, we want to up this to 55% and in five years to 70%," he said.

The company, which has been growing at a CAGR of 30%-plus in the last four-years, sold 16.5 million cases this fiscal (FY11).

"In six years, we aim to up this to 50 million cases, a very achievable target given our track record of high growth," Roy said.