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Sula Vineyards IPO GMP Today: The initial public offering (IPO) of India’s leading wine producer and seller Sula Vineyards opened for subscription on Monday, December 12, 2022. the issue opened for public subscription at 10 am and was subscribed nearly 11 per cent by 12:24 pm on the first day of bidding.
It received total bids for 20,13,816 shares across both the stock exchanges against 1,88,30,372 shares on offer, data from National Stock Exchange (NSE) showed.
The Rs 960.35 crore Sula Vineyards IPO will be available for subscription till Wednesday, December 14, 2022, and the price band of the company has been fixed at Rs 340-357 per share.
Sula Vineyards IPO is entirely an offer for sale (OFS) aggregating to 26,900,532 equity shares by the promoter, investors and other shareholders. The company will not receive any proceeds from the issue.
The OFS comprises the sale of up to 937,203 equity shares by promoter Rajeev Samant and 7,191,835 shares by investors Cofintra SA, 200,000 equity shares by Haystack Investments, 687,389 shares by Saama Capital III, 121,076 equity shares by SWIP Holdings, 7,191,835 shares by Verlinvest SA and 6,579,565 shares by Verlinvest France SA.
Apart from the promoter and investor selling shareholders, other selling shareholders comprising Dinesh G Vazirani, JA Moos, Karishma Singh, Major AV Phatak (Retd), Narain Girdhar Chanrai, Ruta M Samant and Sanjay Naraindas Kirpalani will collectively sell up to 3,991,627 equity shares, according to the information given in the red herring prospectus (RHP).
Half of the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for retail investors.
Nashik-based Sula Vineyards is the country’s largest wine producer and seller as of March 31, 2022. The company produces 56 different labels of wine at four owned and two leased production facilities in Maharashtra and Karnataka.
In addition to the flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia” with its flagship brand “Sula” being the “category creator” of wine in India, the company informed in its RHP.
As part of their Wine Tourism Business, Sula Vineyards own and operate two vineyard resorts located at and adjacent to their winery in Nashik, Maharashtra, under “The Source at Sula” and “Beyond by Sula” brand names, having room capacities of 57 and 10 rooms as of September 30, 2022, respectively. They launched the first wine tasting room in India in FY 2005 at their winery in Nashik, Maharashtra (Source: Technopak Report) followed by a wine tasting room at our “Domaine Sula” facility in Karnataka in FY 2017.
Investors who wish to subscribe to Sula Vineyards IPO can bid in a lot of 42 equity shares and multiples thereafter. At the upper price band, they will be shelling out Rs 14,994 to get a single lot of Sula Vineyards. The shares will be listed on both BSE and NSE.
The applicants also must note that the cut-off time for UPI mandate acceptance is Wednesday, December 14, 2022, upto 5:00 pm, the last day of IPO bidding. Further bids with confirmed status of mandate amount blocked (RC100) shall be considered as valid applications and hence, investors are advised to submit their UPI applications in IPO well in advance to avoid any last minute technical/systemic constraints that may hamper their ability to participate in IPOs by successfully accepting the mandate.
Kotak Mahindra Capital, CLSA India and IIFL Securities are the book-running lead managers to the offer while KFin Technologies is the registrar of the issue.
Before heading into the IPO, the wine producer and seller on Friday raised over Rs 288.10 crore (Rs 2,88,10,46,406) from 22 anchor investors in lieu of 80,70,158 equity shares at Rs 357 each, data from the stock exchanges showed.
The anchor investors include BNP Paribas Arbitrage, Morgan Stanley (Asia) Singapore, Citigroup Global Markets Mauritius, Goldman Sachs and Abu Dhabi Investment Authority, ICICI Prudential Life Insurance, HDFC Life Insurance, Aditya Birla Life Insurance, Max Life Insurance, Aditya Birla Sun Life Mutual Fund (MF), SBI MF and and HDFC MF among others.
Commenting on the offer, Ravi Singh, vice president and head of research at Share India Securities said, “Sula Vineyards has around 52 per cent market share in the Indian wine segment. However, the financial performance of the company makes the IPO overpriced by discounting all near-term positives. The lower promoters’ holding is also a matter of concern. Investors may subscribe to this IPO for listing day gains.”
The research teams at Motilal Oswal Financial Services, Geojit Financial Services and ICICI Securities in their respective IPO notes have given a “Subscribe” rating to the offer. However, those at Reliance Securities haven’t rated the IPO.
Geojit Research in its IPO note said, “At the upper price band of Rs 357, SVL is available at a P/E of 49x (FY23 annualized), which appears reasonably priced compared to peers. Considering the wine market’s future growth potential, high barriers of entry, SVL’s improved margins for past 3 years, focus on own brands & premiumization of product portfolio, strong distribution network, expansion of wine tourism business, we assign a “Subscribe” rating on a long term basis.”
Motilal Oswal Financial Services in its report noted, “Sula has market leadership in the India’s grape wine industry especially in premium brands. It enjoys high entry barriers and is well placed to capture the industry growth. We like its focus on D2C model, premiumization and efforts on improving its operational efficiencies. The IPO is valued at P/E of 49x 1HFY23 annualized EPS. Given first of its kind listing in wine category, there could be fancy for the IPO. We suggest investors can Subscribe for listing gains.”
The share allotment is likely to take place on Monday, December 19, 2022, and the shares are expected to be listed on Thursday, December 22, 2022, according to the timeline given in the RHP.
