Jubilant likely to raise Rs 5,500 cr via bonds for Coke bottling biz deal

Banking sources said the group is exploring the prospect of issuing debentures

Jubilant Bhartia Group is planning to raise up to ₹5,500 crore through bonds to finance its acquisition of 40 per cent stake in Coca-Cola’s Indian bottling business. Banking sources said the group is exploring prospects of issuing debentures.

 

The stake acquisition in Hindustan Coca Cola Ltd. is estimated to involve an outgo of ₹12,550 crore. The plan is to finance it through mixed debt, convertible instruments and equity from the group.

 

Jubilant Bhartia Group did not respond to queries from Business Standard by the press time.

 

The group may also likely rope in private capital investor for some portion of funding. Two companies from Jubilant group are likely to float debentures to raise money. One of them would be Jubilant Beverages Ltd (JBL), the banker said.

 

On December 11, 2024, the group, through JBL, entered into an agreement with The Coca Cola Company group (TCCC) entities to acquire 40 per cent stake in Hindustan Coca Cola Holdings Pvt Ltd (HCCH), as a strategic investor. The transaction is subject to regulatory approvals.

 

HCCB is engaged in the preparation, packaging, distribution and sale of non-alcoholic ready-to-drink (NARTD) beverages.

 

The group has the flexibility to retire the acquisition debt through multiple avenues, including through stake sale in HCCH and other listed entities or by way of refinancing.

 

JBL’s debentures carry “AA” ratings from CRISIL.

 

JBL will raise funds on the strength of its shareholding in HCCH as well as the Jubilant Bhartia group’s shareholding in entities including Jubilant Foodworks Ltd (JFL), Jubilant Pharmova Ltd (JPL) and Jubilant Industries Ltd etc.

 

These entities continue to maintain healthy credit risk profiles, supported by their established business positions, good operating capabilities as well as financial risk metrics, according to the rating agency.

 

These strengths are partially offset by exposure to market risks. Any impact on the financial flexibility of the holding companies of the Jubilant Bhartia Group owing to sizable debt-funded acquisition or investment or support to group entities will be monitorable, CRISIL added.

 

Since there are no coupon-linked payments to the proposed NCDs, incremental capital or working requirements are expected to remain negligible.

 

The outlook on JBL debentures is stable.

 

The company is expected to maintain comfortable debt cover over the medium term, supported by the healthy operating performance of the key operating entities of the group, it said.