Ravi Jaipuria is planning to list Varun Beverages on domestic stock exchanges through a INR1,000 crore IPO. Varun Beverages is the largest bottler of PepsiCo in India while its world ranking is second. Although no regulatory paperwork has been filed so far for the IPO, the company has started preparations in this direction, claimed the Mint business daily. The newspaper contacted three people with knowledge of the matter.
The broad contours of the IPO indicate that a listing is possible in early 2017 with the aim of raising INR1,000 crore. Varun Beverages is the flagship company of RKJ Group which also counts fast-food restaurants, education and hospitality in its businesses. The fast-food business is housed under Devyani International in which Temasek has about 15% stake.
Varun has hired a couple of banks recently and work on the IPO has been started. The company is also in talks to hire a couple of more banks
Varun Beverages has operations in India, Nepal and Sri Lanka and comes second to China’s Tingyi Holdings Corporation in terms of the pecking order of global PepsiCo bottlers.
While RKJ Group’s companies are mostly closely-held private entities, PE investors Standard Chartered Private Equity and Aion Capital Partners have equity stake in Varun Beverages. Aion Capital Partners – a joint venture of Apollo Global Management and ICICI Venture – invested in 2015 while Standard Chartered Private Equity made its first investment in Varun Beverages nearly five years ago. This is typically the timeframe during which PE investors start looking for an exit. However, none of the two PE firms is planning to sell shares in the IPO. This is a great sign of confidence in the management and execution capabilities of the company.
On its website, the group claims to have 46 Pizza Hut Restaurants and 1 KFC Restaurant. It became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India.