14 Nov , 2024 By : Debdeep Gupta
Varun Beverages got approval for the QIP in October, with funds to be used for investments in subsidiaries, joint ventures, and associates, as well as for expanding its product portfolio, entering new markets, and making strategic acquisitions.
Shares of Varun Beverages soared as much as 5 percent on November 14 after reports suggested that the company launched a Qualified Institutional Placement (QIP) to raise funds. The company had received an approval for this QIP back in October.
At 10.02 am, shares of Varun Beverages were trading at Rs 586.65 on the NSE.
According to a CNBC-TV18 report, the QIP has a base deal size of Rs 5,500 crore, with the potential to increase by Rs 2,000 crore, bringing the total size to Rs 7,500 crore. The indicative price is set at Rs 565 per share, offering a less than one percent discount to the last closing price and a 5 percent discount to the SEBI floor price. The equity dilution for this issuance is estimated at 4.1 percent. Motilal Oswal Investment Advisors, along with other financial firms, are serving as the book-running lead manager (BRLM).
The funds raised will be used by one of the largest franchise bottlers for PepsiCo globally, for making investments in subsidiaries, joint ventures, or associates and to fund the growth of existing businesses, expand the product portfolio, enter new territories, and make strategic acquisitions, the company previously stated.
As for the quarterly earnings, Varun Beverages reported a net profit of Rs 619.6 crore, up from Rs 501 crore last year. Revenue grew 24 percent on year to Rs 4,805 crore, driven by the growth in BevCo's expanded distribution, increased product penetration, and favorable demand trends in key markets.
Meanwhile, the PepsiCo bottler also announced its acquisition of two African companies earlier this week. Varun Beverages has acquired full ownership of two African companies involved in manufacturing and distributing Pepsi and other related beverage brands. On November 12, the company confirmed taking full control of SBC Tanzania for Rs 1,304 crore and SBC Beverages Ghana for Rs 127.1 crore.
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