India’s largest winemaker Nashik Vintners and owners of Sula Wines, is facilitating an exit for financial investors in a big stake sale, states a recent report in The Economic Times. This has attracted early interest from Moet Hennessy Louis Vuitton (LVMH) through its investment company L Capital, along with Cognac maker Rémy Cointreau, among others.
According to the news report, the company is selling a large stake in order to facilitate an exit for financial investors who control around 50% of the company. The mandate for the proposed sale is with Investment bank Avendus Capital. Founder Rajeev Samant, who returned about two decades ago from Silicon Valley to produce wine in India, had no comment.
Sula sells over 500,000 cases of wine out of approximately 2.1 million cases sold plus about a 50% share of the premium wines sold in the country.The Samant family owns almost 50% of the company.
Sula has distribution rights for Cointreau Remy brands and there was talk of their launching a locally bottled premium brandy, for which grapes have been crushed pending a bottling license.
In the financial year 2012, Nashik Vintners reported Rs 145 crore revenue and Rs 13 crore net profit, growing 40% and 66%, respectively. The operating profit was said to be Rs 20 crore.
As the business newspaper reports, the Indian wine market has had its share of turmoil following the global financial crisis, with sobering sales growth and a supply glut in the wine heartland of Nashik.
A senior industry executive was quoted as saying, “The market has remained small so that even the cost of maintaining leadership is not very cheap.”
For further details go to the news report.