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Allied Blenders and Distillers Ltd IPO Review: Allied Blenders and Distillers Ltd is planning an INR 1,500 crore IPO, which will include a fresh issue of 1000 crore shares and an offer to sell 500 crore shares. The corporation intends to prepay certain outstanding borrowings as well as for general corporate objectives.
Allied Blenders and Distillers Ltd IPO – Important Dates
| Allied Blenders & Distillers Ltd IPO Date | June 25, 2024 to June 27, 2024 |
| Allied Blenders & Distillers IPO Ltd Listing Date | July 2, 2024 |
| Allied Blenders & Distillers IPO Price | INR 267-281 per share |
| Allied Blenders & Distillers IPO Lot Size | 53 Shares |
| Allied Blenders & Distillers IPO Total Issue Size | INR 1500 crores |
| Allied Blenders & Distillers IPO Basis of Allotment | June 28, 2024 |
| Allied Blenders & Distillers IPO Initiation of Refunds | July 1, 2024 |
| Allied Blenders & Distillers IPO Credit of Shares to Demat | July 1, 2024 |
| Allied Blenders & Distillers IPO Issue Type | Book Built Issue IPO |
| Allied Blenders & Distillers IPO Listing At | BSE, NSE |
Allied Blenders and Distillers Ltd IPO – Company Profile
Allied Blenders and Distillers Limited is India’s largest Indian-owned, Indian-made foreign liquor (“IMFL”) company, as well as its third largest. The company is one of India’s only four spirits companies with a pan-India sales and distribution network, as well as a significant IMFL exporter.
The company is a prominent player in India’s alcoholic beverage market, with an 8.2% IMFL segment share and 12 regional offices spread across the country. Its wide sales network includes 30 states, 64,001 domestic stores, and 22 international markets.
The company’s brand power is seen in its accolades and lifestyle-oriented positioning that emphasizes awareness, product attractiveness, and quality. Previous initiatives such as sports league agreements and celebrity sponsorships have resulted in considerable corporate development and financial performance. The managing director of the company is Mr. Alok Gupta.
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Allied Blenders and Distillers Ltd IPO – Fundamental Analysis
The fundamental study of Allied Blenders and Distillers Limited indicates varied results. Revenue decreased from March 2022 to December 2023, falling short of the prior year’s benchmark. Profitability, EPS, and RoNW have all decreased, creating investor concerns.
- Revenue Trend: The revenue rose from ₹89,345.97 million in March 2022 to ₹81,190.65 million in March 2023. The revenue for the current year’s 9-month period ending December 2023 is INR 63,787.76 million, which is lower than the previous year’s annual benchmark.
- Equity and Liabilities: Equity has consistently increased over time, indicating potential growth and expansion. However, the debt-equity ratio has fallen, indicating a lower reliance on debt financing.
- Profitability: The profit after tax (PAT) declined from ₹152.01 million in March 2022 to ₹25.08 million in December 2023. The reduction in profitability may concern investors.
- Earnings per Share (EPS): The diluted EPS declined from ₹0.65 in March 2022 to ₹0.10 by December 2023, resulting in lesser earnings per share for investors.
- Return on Net Worth (RoNW): The RoNW has increased from 5.21% to 0.66%, showing a decline in the company’s ability to earn returns on shareholder equity.
- Financial Position: Total assets have increased, indicating future business growth. However, the current ratio has risen, indicating stronger liquidity and probable difficulties in satisfying short-term obligations.
- Inventory Turnover Ratio: The Inventory Turnover Ratio has significantly decreased, which may indicate slower sales or ineffective inventory management.
Allied Blenders and Distillers Ltd IPO Financial Analysis
| Particular | As of 31 March 2019 | As of 31 March 2020 | As of 31 March 2021 |
| Revenue (₹ in Million) | 89,345.97 | 81,190.65 | 63,787.76 |
| Equity (₹ in Million) | 2,918.17 | 3,796.19 | 3,817.82 |
| Expenses (₹ in Million) | 86,298.88 | 78,855.69 | 61,848.16 |
| Profit and Loss After Tax (₹ in Million) | 152.01 | 127.93 | 25.08 |
| RoNW (%) | 5.21 | 3.37 | 0.66 |
| NAV per Equity Share (₹) | 12.39 | 15.66 | 15.75 |
| Diluted EPS only (₹) | 0.65 | 0.53 | 0.10 |
| Total Assets (in millions) | 26,315.92 | 24,003.65 | 22,985.68 |
| Total Liabilities (in millions) | 23,397.74 | 20,207.46 | 19,167.86 |
| Debt Equity Ratio | 4.58 | 2.72 | 2.50 |
| Current Ratio (in time) | 0.85 | 0.87 | 0.84 |
| Inventory Turnover Ratio | 6.93 | 7.64 | 6.62 |
Allied Blenders and Distillers Ltd IPO Peer Comparison
Allied Blenders and Distillers Limited is a major operator in the alcohol industry. United Spirits Limited leads with a wide portfolio. Radico Khaitan Limited prioritizes quality and innovation. Globus Spirits Limited prioritizes growth and sustainability.
| Company | Total Income (₹ in million) | Face Value per Equity Share (₹) | P/E | EPS (Basic) (₹) | EPS (Diluted) (₹) | RoNW (%) | NAV per Equity Share (Basic) (₹) |
| Allied Blenders and Distillers Limited | 63,978.12 | 2 | NA | 0.11 | 0.10 | 0.66 | 15.75 |
| United Spirits Limited | 2,74,581.00 | 2 | 142.62 | 5.41 | 5.41 | 8.92 | 55.86 |
| Radico Khaitan Limited | 1,05,180.01 | 2 | 39.20 | 20.75 | 20.74 | 14.75 | 134.23 |
| Globus Spirits Limited | 16,786.90 | 10 | 19.37 | 50.00 | 50.00 | 24.38 | 205.10 |
Allied Blenders and Distillers Ltd IPO Objective
Allied Blenders and Distillers Limited aims to manage debt effectively through prepayment or planned repayment schemes for a percentage of outstanding borrowings.
- Prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company: The company proposes to use INR 708.98 crores of net proceeds to prepay loans, taking into account costs, lender conditions, and legal compliance, with the goal of reducing debt and fostering business growth.
- General Corporate Purposes: The company intends to use the net proceeds for general corporate objectives such as working capital, brand promotion, subsidiary investments, and other routine business operations. Furthermore, firms may set aside funds to cover a variety of critical expenses incurred during their everyday operations.
Allied Blenders IPO Risks and Challenges
The risk for Allied Blenders & Distillers Limited involves compliance concerns with state tenders and advertising limitations, which necessitate major investment. In the competitive IMFL sector, effective market responsiveness is critical for long-term success.
- ABD Limited bears risks in state bids, including noncompliance penalties. Advertising regulations impede brand promotion, necessitating significant expenses. Effective market reactivity is important for long-term success in the intensely competitive IMFL industry, which is headed by major rivals.
- Participation in state beverage corporation tenders presents difficulties, including potential noncompliance with severe contract terms such as order-based supply, forfeiture risks, transportation losses, quality standards, excise duty advances, late payments, and penalties for unsold stock. Regulatory audits and tender delays jeopardize corporate stability.
- Restrictions on alcoholic beverage advertising, motivated by public concern about alcohol-related issues, impede brand marketing. Adhering to industry regulations during fierce rivalry may necessitate significant investment. Evolving regulations present a risk, possibly affecting brand visibility, consumer goodwill, and financial performance.
Allied Blenders & Distillers Ltd IPO – Industry & Market Potential
The Indian alcoholic beverage market is evenly split between country liquor, Indian Made Foreign Liquor (IMFL), and beer, with minor contributions from wines and imported spirits. The projected growth rate forecasts a volume of 1,200 million cases by fiscal 2025.
In fiscal 2021, flavored native alcoholic beverages, known as country or Indian-made Indian liquor (IMIL), accounted for roughly one-third of the alcohol market by volume. IMIL, which is tailored to regional tastes and comes in popular fruit and masala flavors, is aimed at the price-sensitive, lower-income audience and is widely accepted in rural communities.
The Indian alcoholic beverage market is thriving thanks to favorable demographics, rising incomes, and changing societal standards. Urbanization, a burgeoning middle class, and changing lifestyles all boost demand for higher-quality services, ensuring a bright outlook.
Allied Blenders and Distillers Ltd IPO – Type of Offer
Allied Blenders & Distillers intends to issue new shares worth INR 1000 crore to repay outstanding loans and meet other company needs. In addition, the corporation makes a selling offer, hoping to sell 500 crore of its current shares.
- Fresh Issue: The corporation plans to raise funds by issuing additional shares, with the goal of collecting INR 1000 crore. The business intends to use the proceeds from the new issue to repay some outstanding borrowings and for other corporate purposes.
- Offer for sale: ABD Limited is willing to sell 500 crore of its existing shares. The following are the details of the current shareholders who are also the promoters selling the shares:
| Name of the promoter selling shareholder | Maximum number of offered shares for sale (in millions) |
| Bina Kishore Chhabria | 5000 |
| Resham Chhabria Jeetendra Hemdev | 2500 |
Allied Blenders and Distillers Ltd IPO Allotment Structure
Allied Blenders & Distillers will allocate 75% to Qualified Institutional Buyers (QIB), 15% to Non-Institutional Investors (NII), and 35% to Retail Individual Investors (RII) in accordance with SEBI norms. A portion of the proceeds are also set aside for qualifying employees.
● Qualified Institutional Buyers (QIB): According to SEBI norms, 50% of the shares offered in the IPO would be reserved for Qualified Institutional Buyers. These include banks, mutual funds, and insurance businesses.
● Non-Institutional Investors (NII): Non-institutional investors will receive 15% of the shares. These often include corporate entities or individuals who invest more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 35% of the shares will be allocated to retail individual investors. These individual investors apply for shares with a total value of less than Rs. 2 lakhs.
Allied Blenders and Distillers Ltd IPO GMP
| IPO OPEN TO CLOSE DATE | IPO PRICE | LATEST GMP | ESTIMATED LISTING GAIN |
| 25 June to 27June 2024 | 281 | 87 | 368 (30.96%) |
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Allied Blenders and Distillers Ltd IPO: Should you Apply or Not?
Anand Rathi categorized the public offering as ‘supply’, citing the company’s P/E ratio of 1,405 times FY24 annualized earnings, market capitalization of ₹78,596 million following equity share issuance, and market cap-to-sales ratio of 0.99 times FY24 annualized earnings. The company intends to utilize the money to pay down debt, reduce financing costs, and increase profit margins. Despite the fact that the issue is fully priced in the near term, the company’s long-term business prospects look positive. As a result, we offer a “Subscribe – Long Term” rating for the IPO.
BP Equities has also tagged the public offer as ‘subscribe’, stating, “On the valuation perspective, the issue appears pricey on numerous fronts and ahead of its peer set. However, given the alcohol market dynamics and the company’s strong position in the IMFL environment, we recommend that high-risk investors “Subscribe” to the issue for listing gains.”
Sushil Finance, Marwadi Shares and Finance, and SBICAP Securities have advised a ‘buy‘ rating for the public offering, while Swastika Investmart advises primary market investors to avoid it.
Allied Blenders & Distillers IPO FAQs
1. What Is the Allotment Date of the Allied Blenders & Distillers IPO?
The allotment date of the Allied Blenders & Distillers is June 28, 2024.
2. What Is the Price Band of the Allied Blenders & Distillers IPO?
The price band of the issue is INR 267-281 per share.
3. What Is the Size of the Allied Blenders & Distillers IPO?
The offer size for Allied Blenders & Distillers is INR 1,500 crores, which includes a fresh issue of INR 1000 crores and an offer to sell 500 crore shares. The corporation is looking for capital to prepay existing loans and for general corporate purposes.
4.What Is the Listing Date of the Allied Blenders & Distillers IPO?
The listing date of Allied Blenders & Distillers is July 2, 2024.
Note: The information associated with the IPO is for educational purposes only. Consider with your financial advisor before investing in an IPO.
