Varun Beverages PepsiCo franchisee Varun Beverages to tap markets for Rs 7,500 cr QIP in November: Report
Mumbai/IBNS: Billionaire Ravi Jaipuria's Varun Beverages Limited, PepsiCo's largest bottling partner in India, plans to raise up to Rs 7,500 crore through a Qualified Institutional Placement (QIP) to attract funds from institutional investors, Moneycontrol reported on Thursday (Oct. 31), citing its sources.
This capital will mainly support the company's balance sheet and expand its production capacity. Investment banks Kotak Mahindra Capital and Jefferies are advising Varun Beverages in this endeavor, according to the report.
The QIP is expected to launch next month, pending shareholder approval.
Shareholders have until November 8 to submit their votes.
Varun Beverages stated in a notice that the funds will be invested in subsidiaries, joint ventures, or associates, potentially through equity, preference capital, or debt.
The capital will be allocated to expanding the company's product portfolio, entering new markets, and making strategic acquisitions.
Additionally, some funds will go toward repaying or prepaying existing loans held by the company or its subsidiaries.
Varun Beverages is PepsiCo’s second-largest franchise globally, operating in 10 countries and holding distribution rights in four others.
Its product lineup includes PepsiCo brands like Pepsi, Pepsi Black, Mountain Dew, Sting, Seven-Up, Mirinda, Tropicana, Gatorade, and Aquafina.
It also distributes snack brands such as Lays, Cheetos, Doritos, and Kurkure, alongside its own brands, Refreshhh and Cream Bell.
In India, Varun Beverages controls PepsiCo’s franchise rights in 27 states and seven union territories, accounting for nearly 90 percent of PepsiCo India's beverage sales volume.
Additionally, it holds franchise rights in Nepal, Sri Lanka, Morocco, Zambia, and Zimbabwe.
For the quarter ending September 30, the company posted a 24.1 percent increase in revenue to Rs 4,804.6 crore, with profits up by 22.3 percent at Rs 628.83 crore, as reported by Moneycontrol.
The QIP route has seen record fundraising this year, with Rs 86,581.81 crore raised in the first nine months of 2024 alone, surpassing the previous full-year record of Rs 80,816.2 crore in 2020, according to Prime Database.
The 2024 figures reflect a broader adoption of QIP, with 67 companies participating, compared to just 25 in 2020, as per reports.
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