Allied Blenders and Distillers Limited IPO

Allied Blenders and Distillers Limited IPO

Allied Blenders and Distillers are coming up with an IPO with a fresh issue of shares worth INR 1000 crores and an offer to sell 1000 crores of existing equity shares. The company will use the raised funds to prepay certain outstanding borrowings and general corporate purposes.

ABD IPO – Important Details

Allied Blenders & Distillers IPO DateNA
Allied Blenders & Distillers IPO Listing DateNA
Allied Blenders & Distillers IPO PriceNA
Allied Blenders & Distillers IPO Lot SizeNA
Allied Blenders & Distillers IPO Total Issue SizeINR 2000 crores
Allied Blenders & Distillers IPO Basis of AllotmentNA
Allied Blenders & Distillers IPO Initiation of RefundsNA
Allied Blenders & Distillers IPO Credit of Shares to DematNA
Allied Blenders & Distillers IPO Issue TypeBook Built Issue IPO
Allied Blenders & Distillers IPO Listing AtBSE, NSE

Allied Blenders and Distillers Limited IPO – Company Profile

Allied Blenders and Distillers Limited is the largest Indian-owned, Indian-made foreign liquor (“IMFL”) company and India’s third largest IMFL company. The company is one of India’s only four spirits companies with a pan-India sales and distribution footprint and a leading exporter of IMFL.

The company is a leading player in the Indian alcoholic beverages market; it commands an 8.2% market share in the IMFL segment. Operating across 30 States and Union Territories, their extensive pan-India sales network, comprising 12 regional offices and comprehensive route-to-market capabilities, supports sales growth. Their products are available in 64,001 outlets in India and exported to 22 international markets.

 The company’s brand strength is evident through awards received at prestigious events, and its lifestyle-oriented brand positioning focuses on awareness, product appeal, affordability, quality, and consumer engagement. Past initiatives include partnerships with sports leagues, regional football leagues in critical markets, and celebrity brand ambassadors, contributing to significant business growth and financial performance.

Allied Blenders and Distillers Limited IPO – Fundamental Analysis

Allied Blenders & Distillers Ltd’s IPO might carry risks. The company has experienced declining revenue, profitability, and RoNW. Although there are signs of debt reduction and stable inventory management, the downward financial trends raise concerns about its operational performance and sustainability.

Revenue: 

The company has witnessed declining revenue over the years, from ₹89,345.97 million in 2019 to ₹63,787.76 million in 2021, indicating a concerning downward trend.

Profitability: 

There has been a significant decrease in profitability, as evidenced by the decline in Profit After Tax from ₹152.01 million in 2019 to ₹25.08 million in 2021. This substantial reduction raises concerns about the company’s operational efficiency.

Return on Net Worth (RoNW): 

The RoNW has consistently decreased from 5.21% in 2019 to 0.66% in 2021, indicating declining efficiency in utilizing shareholders’ funds to generate profits.

Debt Equity Ratio: 

While there’s been a reduction in the debt-equity ratio over the years, it remains at a considerable level, indicating dependency on debt financing. The trend suggests a positive direction, but the debt level remains high, requiring attention.

Liquidity Ratios: 

The current ratio has stayed relatively stable but is below the ideal benchmark of 1. This could indicate potential challenges in meeting short-term obligations.

Inventory Turnover Ratio: 

The inventory turnover ratio has fluctuated slightly but remains relatively stable, indicating reasonable inventory management.

Total Assets and Liabilities: 

Both assets and liabilities have decreased over the years, suggesting some reduction in the company’s overall size but with an improved debt structure.

Allied Blenders & Distillers Ltd IPO Financial Information

ParticularAs at 31 March 2019As at 31 March 2020As at 31 March 2021
Revenue (₹ in Million)89,345.9781,190.6563,787.76
Equity (₹ in Million)2,918.173,796.193,817.82
Expenses (₹ in Million)86,298.8878,855.6961,848.16
Profit and Loss After Tax (₹ in Million)152.01127.9325.08
RoNW (%)5.213.370.66
NAV per Equity Share (₹)12.3915.6615.75
Diluted EPS only (₹)0.650.530.10
Total Assets (in million)26,315.9224,003.6522,985.68
Total Liabilities (in million)23,397.7420,207.4619,167.86
Debt Equity Ratio4.58 times2.72 times2.50 times
Current Ratio0.850.870.84
Inventory Turnover Ratio6.93 times7.64 times6.62 times

ABD IPO Peer Comparison

Allied Blenders has a lower EPS of ₹0.11, while United Spirits maintains a high income despite a lower RoNW of 8.92%. Radico Khaitan demonstrates a moderate P/E of 39.20 alongside robust earnings, whereas Globus Spirits showcases substantial EPS and a 24.38% RoNW.

CompanyTotal Income (₹ in million)Face Value per Equity Share (₹)P/EEPS (Basic) (₹)EPS (Diluted) (₹)RoNW (%)NAV per Equity Share (Basic) (₹)
Allied Blenders and Distillers Limited63,978.122NA0.110.100.6615.75
United Spirits Limited2,74,581.002142.625.415.418.9255.86
Radico Khaitan Limited1,05,180.01239.2020.7520.7414.75134.23
Globus Spirits Limited16,786.901019.3750.0050.0024.38205.10

Allied Blenders and Distillers Limited IPO Objective

Allied Blenders and Distillers Limited intends to utilize ₹708.98 crores from net proceeds to prepay specific loans, considering costs, lender conditions, and legal compliance to reduce debt and support business growth. Additionally, net proceeds will address general corporate needs, including working capital, brand promotion, subsidiary investments, and other routine expenses.

1. Prepayment or scheduled repayment of a  portion of certain outstanding borrowings availed by the company: The company plans to use ₹708.98 crores from net proceeds to prepay certain loans, subject to varying outstanding amounts and terms. Factors influencing choices include costs, lender conditions, consents, penalties, legal compliance, and commercial considerations, aiming to reduce debt and facilitate business growth.

2.  General Corporate Purposes: The company plans to use the net proceeds for general corporate purposes, including day-to-day expenses, working capital, brand promotion, subsidiary investments, and other ordinary business activities. In addition, businesses may allocate funds for various necessary costs incurred in their daily operations.

Allied Blenders and Distillers Limited IPO Risks And Challenges

ABD Limited faces risks in state tenders, risking non-compliance penalties. Advertising restrictions hinder brand promotion, demanding substantial investments. Effective market responsiveness is critical for sustained success in the fiercely competitive IMFL industry, led by significant rivals.

  1. Participation in state beverage corporation tenders poses challenges, including potential non-compliance with stringent contract terms, such as order-based supply, forfeiture risks, transit losses, quality standards, excise duty advances, delayed payments, and penalties for unsold stock. Regulatory audits and tender delays further threaten business stability.
  2. Restrictions on alcoholic beverage advertising, driven by public concerns on alcohol-related issues, hinder brand promotion. Adhering to industry norms amid intense competition may demand substantial investments. Evolving regulations pose a risk, potentially impacting brand visibility, consumer goodwill, and financial performance.
  3. The Indian IMFL industry, led by competitors like United Spirits Limited and Pernod Ricard, faces intense rivalry based on product offerings, brand image, pricing, service, and distribution. Larger rivals with superior resources pose a threat. 
  4. Almost 51% of the revenue comes from West Bengal, Telangana and Uttar Pradesh. Any reduction in sales of the products in such key States could have a material adverse effect on the business, financial condition, results of operations, and prospects.

ABD IPO – Industry & Market Potential

The Indian alcoholic beverage market is evenly distributed among country liquor, Indian Made Foreign Liquor (IMFL), and beer, with minor contributions from wines and imported spirits. Projected growth anticipates a volume surpassing 1,200 million cases by Fiscal 2025.

In Fiscal 2021, flavored local alcoholic beverages, called country or Indian-made Indian liquor (IMIL), constituted nearly one-third of the alcohol market by volume. Tailored to regional tastes, with popular fruit and masala flavors, IMIL targets the price-sensitive, lower-income demographic, enjoying widespread acceptance in rural areas.

The Indian alcoholic beverage industry is thriving, fueled by favorable demographics, a burgeoning middle class, rising incomes, a preference for premium experiences, increased rural consumption, and social acceptance. The growing workforce, changing lifestyles, and evolving societal norms contribute to the industry’s positive outlook. Urbanization, a rising middle class, economic growth, and a yearly influx of legal drinking-age individuals further drive alcohol consumption and prompt consumers to opt for higher-quality offerings.

 Allied Blenders IPO – Type of Offer

Allied Blenders & Distillers plans a fresh issue of shares, seeking INR 1000 crores to repay outstanding loans and general corporate needs. Additionally, the company proposes an offer for sale, intending to sell 1000 crore existing shares.

  1. Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 1000 crores. The company intends to utilize the proceeds from the fresh issue for the prepayment of certain outstanding borrowings availed by the company and general corporate purposes.
  2. Offer for sale: ABD Limited is offering to sell 1000 crore existing shares. The following are the details of the existing shareholders who are also the promoters selling the shares:
Name of the promoter selling shareholderMaximum number of offered shares for sale (in million)
Bina Kishore Chhabria5000
Resham Chhabria Jeetendra Hemdev2500

Allied Blenders IPO Offer Size

Allied Blenders & Distillers is launching an IPO involving a fresh issue of INR 1000 crores and selling 1000 crore shares. The company will allocate the funds to prepay outstanding borrowings and general corporate purposes.

Allied Blenders IPO Allotment Structure

Allied Blenders & Distillers allocation will be as follows: 75% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 35% for Retail Individual Investors (RII) in accordance with SEBI regulations. A portion of the issue is also set aside for the eligible employees. 

Qualified Institutional Buyers (QIB): As per SEBI regulations, 50% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.

Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.

Retail Individual Investors (RII): The remaining 35% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs

How to apply for an Allied Blenders & Distillers Ltd IPO?

To apply for the Allied Blenders & Distillers IPO through Alice Blue, you would typically follow these steps:

1.Open a Demat and Trading Account: If you don’t have one already, you would need to open a Demat and trading account with Alice Blue.

2.Check for IPO Details: Once your account is active, you can check for the Allied Blenders & Distillers IPO details in the IPO section of the Alice Blue platform.

3.Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.

4.Submit the Application: Confirm all your details and submit your application.

 You can apply for the Allied Blenders & Distillers Limited’s IPO at Alice Blue [M1] in just a few clicks!

Check Allotment Status: Post the allotment process; you can check the allotment status to see if you have received any shares.

Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.

How to Check Allied Blenders & Distillers IPO Allotment Status on Alice Blue?

Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:

  1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app. 
  2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
  3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
  4. Select the Allied Blenders & Distillers IPO: If you have applied for multiple IPOs, there might be a dropdown menu or lists where you can select the IPO you are interested in. Select the Allied Blenders & Distillers IPO.
  5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.

If you face any issues, it’s recommended that you contact Alice Blue’s customer support for detailed assistance.

Apart from Alice Blue, there are other ways to check the allotment status of the Allied Blenders & Distillers IPO:

Registrar’s Website: Visit the website of Link In Time India Private Limited, the registrar of the Allied Blenders & Distillers IPO. On the homepage, look for the ‘IPO Allotment Status’ option. You must enter your PAN, application, or Demat account number to check your allotment status. Click on the ‘Submit’ button to view your IPO allotment status.

NSE and BSE: You can also check the allotment status on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) official websites. You would need your application number and PAN to check the status.

Please note that the allotment status will only be available after completing the allotment process, a few days after the IPO window closes.

Allied Blenders & Distillers IPO Offer Registrar

The registrar for the Allied Blenders & Distillers IPO is Link In time India Private Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.

Contact information for the registrar:

Link In time India Private Limited

C 101, 247 Park, L.B.S. Marg

Vikhroli (West), Mumbai –400 083

Maharashtra, India

Telephone: 022 4918 620087

Email: [email protected]

Website: www.linkintime.co.in

Allied Blenders & Distillers IPO FAQs

1. What is the allotment date of the Allied Blenders & Distillers IPO?

The allotment date has not yet been announced.

2. What is the price band of the Allied Blenders & Distillers IPO?

The price band of the shares issued by the company has not yet been announced.

3. What is the size of the Allied Blenders & Distillers IPO?

Allied Blenders & Distillers is launching an IPO involving a fresh issue of INR 1000 crores and the sale of 1000 crore shares. The company will allocate the funds for the prepayment of certain outstanding borrowings availed by the company and for general corporate purposes.

4. What is the listing date of the Allied Blenders & Distillers IPO?

The listing date of the issue has yet to be announced.

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