Sula Vineyards IPO

Sula Vineyards Company Profile – Key products, finance, management team, strategic insights

SULA VINEYARDS company and its operation:

Sula Vineyards was started by Rajeev Samant in Mumbai, India in 1999. The company was incorporated as “Nashik Vintners Limited” on February 26, 2003. The name of the company changed twice before it became “Sula Vineyards Limited” on February 11, 2022. Earlier, the name of the company was changed to “Nashik Vintners Private Limited” on January 24, 2006, and then to “Sula Vineyards Private Limited” on August 11, 2014.

Sula is India’s leading winery spearheading the charge of Indian wine across the world. The company offers red, white, rose, and sparkling wines, spirits, beer, grapeseed oil, and others. The unique climate of Nashik helps in growing different grape varietals that help the company in getting the required raw materials.

The company operates in two areas of business. The first is the production, import, and distribution of wines and spirits. Secondly, the sale of services from ownership and operation of wine tourism venues, including vineyard resorts and tasting rooms may be called the “Wine Tourism Business”. Sula Vineyards also conducts exhibitions of wineries across the country to promote its products and wine tourism.

SULA VINEYARDS Winery Subsidiaries company:

As of 31 March 2022, Sula Vineyards has three subsidiaries. First, Artisan spirits private limited engaged in the business of manufacturing wines and Trading wines and spirits. This is a wholly-owned subsidiary of Sula Vineyards. Secondly, Sula International Limited is also a wholly owned subsidiary that has been struck off with effect from 19 April 2022 and incorporated in the United Kingdom.

The company engaged in the business of Trading wines and spirits. Third, Progressive Alcobev Distributors Private Limited engaged in the business of Trading wines and spirits. Sula Vineyards owns 51% of Progressive Alcobev Distributors Private Limited effective from 1 April 2021.

SULA VINEYARDS Winery Key Products & Services:

Sula Vineyards is one of the largest wine producers and sellers in India. The company has been consistently gaining market share from 33% in FY2009 in the 100% grapes wine category to 52% in value in FY2020 and further increased to 52.6% in FY2021. Sula Vineyards also claims to be the market leader in all four categories of wine products such as ‘Elite’, ‘Premium’, ‘Economy’, and ‘Popular’ wines.

The company distributes wines under the brand name “Sula”, “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia” with its flagship brand “Sula” being the “category creator” of wine in India. This was the first wine company in the country to use an Indian logo.

In addition to having a wide distribution network within India, Sula also exports its wines internationally, as well as imports and distributes wines from leading producers worldwide.

The Sula vines product has been classified into many wine brands which are Rasa – Rasa Cabernet Sauvignon, Rasa Zinfandel; Dindori – Dindori Reserve Viognier, Dindori Reserve Chardonnay, Dindori Reserve Shiraz; The Source – The Source Grenache Rosé, The Source Sauvignon Blanc Reserve, The Source Cabernet Sauvignon; Sula Classics; Día Wine Sparkler; Kadu, etc.

SULA VINEYARDS Winery Management team:

The company is run by visionaries. Rajeev Samant is the Managing Director and the Chief Executive Officer of the company. He is the promoter of Sula vineyard Company. He holds a bachelor’s degree in economics and a master’s degree in science – industrial engineering from Stanford University, United States of America. Before starting this company, he worked with Oracle Corporation.

Chetan Rameshchandra Desai is the Chairman and Non-Executive Independent Director of Sula vineyards. He is a member of the Institute of Chartered Accountants of India. Before joining here, he worked with Haribhakti and Co., LLP as Chartered Accountants for over 39 years.

Bittu Varghese is the Chief Financial Officer of the Company. He has been working with Sula vineyard Company since April 25, 2019. Mr. Varghese holds a bachelor’s degree in commerce from the University of Mumbai. He is a member of the Institute of Chartered Accountants of India.

Neeraj Sharma is the Senior Vice President – Sales of Sula vines company. He has been collaborating with the company since April 15, 2019, and served the company in various capacities. Mr. Sharma holds a bachelor’s degree in technology in dairy technology from the National Dairy Research Institute, Karnal, and a post-graduate diploma in management (agriculture) from the Indian Institute of Management, Ahmedabad.

SULA VINEYARDS Financial snapshot:

Sula Vineyards’ total revenue declined from INR 5232 million in FY 2020 to INR 4567 million in FY 2022, as per the DRHP filed by the company. However, total expenses have also declined from INR 4727 million in FY 2020 to INR 3406 million in FY 2022. However, in comparison with FY2021, FY2022 has done better in terms of revenue.

Total revenue increased by 8.34% from INR 4215 million in FY2021 to INR 4567 million in FY2022, due to an increase in the revenue from operations. Total income decreased by 19.43% from INR 5232 million in FY2020 to INR 4215 million in FY2021. Cost of materials is the major expense for the company that has increased from INR 1093 million in FY2020 to INR 1114.2 million in FY2022.

The company came into profit in FY2021 with INR 30 million. However, Sula vineyards limited was at a loss of INR 159 million in FY2020. The company registered a profit of INR 521 million in FY 2022. As of March 31, 2022, the company had aggregate outstanding borrowings of INR 2,466.50 million, excluding deferred sales tax liabilities and including bank guarantees.

However, EBIDTAE of the company has increased from INR 505 million in FY2020 to INR 1161 million in FY2022 which is almost double. The total asset of the company decreased by 8.7% from INR 8,310.36 million in FY2020 to INR 7,585.60 million in FY2022.

Amounts in INR Million (Year ended March 31)202020212022
Total Income5232.114215.324567
Total Expenses4727.183570.23406.29
Profit/ Loss after Tax-159.3930.14521.39
Source: DHRP document file by SULA VINEYARD limited

Indian Wine Industry Outlook:

The wine industry in India gained momentum after the arrival of Sula in 1998. The industry is nascent in terms of the consumer with a high scope of growth. India is a growing country both in terms of GDP and per capita income. A growing economy and positive demographic factors along with globalization further boost the alco-beverage market in India. The share of low alcoholic beverages in India is about 8% of the total alcohol market.

With the growing working population, and women’s participation both in working class and family events will help the low alcoholic beverages to increase the market share. With cultural changes in India, wine with low alcoholic content is the preferred choice of drinks in family celebrations. This creates big opportunities in the Indian alco-beverage industry.

Wine Consumption across the globe

Percapita wine consumption in India is less than 100 ml. Wine consumption to overall alcohol consumption in India is less than 1% while is it 13% globally. Consumption of wine is higher in developed countries which is as high as close to 30% in Europe. China’s per capita consumption of wine is more than 50 times that of India’s.

In China, the per capita consumption of wine grew from 170 ml in 1980 to cross one liter in the year 2000 with an annual growth of more than 10%, as per capita income grew from close to USD 195 to USD 960 in the same period. Hence, growth in disposable income along with growth in the tourism sector in India will help the wine industry to grow significantly. Wine is becoming a preferred drink for millennials who look to socialize after office hours and on weekends.

Indian alco-beverage market is the third largest market in the world after China and the USA by volume in terms of actual alcohol content of alco-beverages in the year 2020. However, wine consumption in India is very low. India is at 12th position in terms of per capita wine consumption in India with 0.4 liters in the year 2021 while total Per Capita alco-beverage consumption is 11.75 liters in the same time. The Indian wine industry is growing at a much quicker pace at 18.3% by value between FY 2014 to FY 2019.

Indian wine segment is approximately 2 million cases in FY 2021 and projected to grow to 3.4 million cases by FY 2025 with a compounded annual growth rate of more than 14% in volume. In addition to this, supportive central and state government policies further drive the growth of the wine segment in India.

SULA VINEYARDS Growth Strategies:

Sula Vineyards received a seed fund from Verlinvest in the year 2016. Now the company is coming up with an Initial Public Offering (IPO). The details of the Sula Vineyards IPO can be viewed here. The company does not have any direct competitors in the listed space. However, the company faces strong competition from domestic as well as from imported products. A few major domestic competitors are Indage Wines (Chateau Indage), Grover Vineyards, ND Wines, Vintage Wines, Fratelli, and York Winery. Sula Vineyards is in a leadership position in terms of revenue and product combinations followed by Fratelli and Grover Zampa in the Indian wine market.

Sula Vineyards IPO is the first winery to come up with an IPO in India. Sula Vineyards has been one of the major brands among the millennials in India. The company has been focusing on reaching out directly to consumers with various methods such as wine festivals, exhibitions, etc. With the growth in the tourism sector in India, the company is poised to grow strong in the future. This is a good company to invest in and ride the growth of the industry as well as the company. Looking at the fundamentals and financials of the company, Sula Vineyards IPO will be a great success.

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