Varun Beverages plans to raise Rs 7,500 crore to fuel expansion and growth

NEW DELHI: PepsiCo's primary bottling partner, Varun Beverages, plans to fund its growth plans by raising Rs 7,500 crore through Qualified Institutional Placement (QIP).
The company's board, according to a regulatory filing has approved the proposal on Wednesday, allowing for the issuance of equity shares in one or more tranches, subject to shareholder approval via postal ballot.
The funds raised will be allocated towards investments in subsidiaries, joint ventures, and associates, as well as supporting the growth of existing businesses, including expanding the product portfolio, entering new markets, and pursuing strategic acquisitions. Additionally, the proceeds will be used for debt repayment and general corporate purposes.
VBL, which operates on a January-December financial year, reported net revenues of Rs 16,042.58 crore in 2023, a 21.8 per cent increase from the previous year. In the June quarter, the company reported a 28.3 per cent revenue growth, reaching Rs 7,196.86 crore, while its profit rose by 25.5 per cent to Rs 1,261.83 crore. The company has also recently went for a 1:5 share split.
With a partnership spanning over three decades, VBL accounts for 90 per cent of PepsiCo's beverage sales volume in India. The company is actively expanding its licensed territories and sub-territories to drive business growth.
In December, VBL announced the acquisition of South Africa-based Beverage Company (Bevco) and its wholly-owned subsidiaries at an enterprise value of Rs 1,320 crore, enabling the company to extend its presence in the African market. Bevco holds PepsiCo franchise rights in South Africa, Lesotho, and Eswatini.
VBL's operations currently extend across six countries in the Indian sub-continent and Africa, serving over 1.4 billion customers. However, the majority of its revenue, approximately 79 per cent, is generated from its Indian business.