Market regulator approves Sula Vineyards’ proposal to raise funds through IPO

• Sula Vineyards’ public issue will be entirely an offer for sale (OFS) where promoters and shareholders will collectively sell 2.55 crore shares.
• Sula Vineyards distributes wines under a bouquet of brands such as Sula, RASA, Dindori, The source, Satori, Madera and Dia.
• Its business is classified under two categories -- the production, distribution and import of wines and other from wine tourism venues, including vineyard resorts and tasting rooms.
• The winemaker was severely impacted due to Covid-19 because of which it had delivered a loss of ₹15 crore in FY20.

Nashik-based Sula Vineyards, the country’s largest wine producer and seller has received capital markets regulator, SEBI’s approval to raise funds through an initial public offering (IPO).

The wine maker’s public issue will be entirely an offer for sale (OFS) where promoters and shareholders will collectively sell 2.55 crore shares.

Sula Vineyards distributes wines under a bouquet of brands such as Sula, RASA, Dindori, The source, Satori, Madera and Dia. Currently, it produces 56 different labels of wine at four owned and two leased production facilities located in Maharashtra and Karnataka. Its flagship facility is located in Nashik, Maharashtra.

The company said in its draft red herring prospectus (DRHP) that it has consistently gained market share (on the basis of their total revenue from operations) from 33% in FY09 in 100% grapes wine category to 52.6% in FY21.

Its business is classified under two categories -- the production, distribution and import of wines and other from wine tourism venues, including vineyard resorts and tasting rooms.

It has presence in 25 states and six union territories in India and currently offer wines to over 20 countries, including Spain, France, Japan, the UK and the US.

The winemaker’s popular wine-themed music festival SulaFest with footfalls going as high as 10,000 people – has been closed since 2020 due to Covid-19. The festival involves a two-day celebration of wine, music and food in Nashik.

Presently, the majority of wine consumers are from the top urban centres with Mumbai, Bengaluru, Delhi NCR, Pune, and Hyderabad contributing more than 70% of the overall market.

“Our strategy is to increase our focus on the under penetrated markets in major metros like Chennai and Kolkata, the tourist markets of Kerala, Rajasthan and Goa, and other tier-1 and 2 cities across India,” said Sula Vineyards in its DRHP.

The winemaker was severely impacted due to Covid-19 because of which it had delivered a loss of ₹15 crore in FY20.

“In the first half of calendar year 2020, Covid-19 spread to a majority of countries across the world, including India. The Covid-19 pandemic has had, and may continue to have, significant repercussions across local, national and global economies and financial markets,” said the company in DRHP.

However, in FY22 its profits surged to ₹52 crore as against ₹3 crore in FY21.
Source: DRHP

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