Wagh Bakri rules out IPO

Firm is open to acquisitions to speed up growth; is waiting for GST rollout to decide on new plant site

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Ruling out rumours of going public, Gujarat-based Gujarat Tea Processors and Packers Ltd (GTPPL), which markets packaged tea under the Wagh Bakri brand, said that it would very much remain privately held by the Desai family.

The firm is rather waiting for the roll out of the Goods and Services Tax (GST) to decide on the location where it would plan its upcoming manufacturing facility. As Parag Desai, executive director, GTPPL said, "We have absolutely no plans of going for a listing on the bourses, we would continue to remain family held." Media reports had earlier suggested that the firm was planning to go public in order to raise funds for acquisitions of plantations overseas.

He added that Wagh Bakri has increased its manufacturing capacity by about 50 per cent every four years, and was now waiting for the GST roll out to decide on the location of its future plan. An uniform GST would do away with the need to consider varied tax structures on goods and commodities across India, as well as the incentive of putting up manufacturing sites at tax havens.

Wagh Bakri currently has a processing capacity of around 35 million kg per annum and had increased its capacity around two and half years back."We are clocking a 10-12 per cent growth rate in the domestic market, and are currently operating two plants in Gujarat," Desai explained.GTPPL had a turnover of around Rs 750 crore in FY14, Desai claimed.

As on the exports front, the company is clocking a compounded annual growth rate (CAGR) of 15 per cent. "We will continue to grow steadily on the exports front," Desai said adding that the company currently exported to around 30 countries.

Exports had touched around one million kg last fiscal. When asked if Wagh Bakri was open to inorganic growth to speed up its growth rate on the exports front, Desai said that such a possibility could not be ruled out.

"We are definitely looking at such options, however, nothing is concrete as of now," he clarified.  After opening its signature lounges in Mumbai and Delhi, Wagh Bakri opened its first tea lounge in its home town Ahmedabad on Thursday.