Stanford Alum’s 26-Year-Old Winemaker Braves India IPO Market

Winemaker Braves India IPO Market: One of the few businesses looking to go public in Mumbai this year is gauging investor interest in India’s expanding wine market, even as recession fears have caused new listings to grumble this year.

Sula Vineyards Ltd., which last month filed for an IPO, claims to control more than 50% of India’s modest but expanding wine market. To popularise the beverage in a developing nation with a growing middle class, the 26-year-old company has established tasting rooms and held an annual music festival.

According to Abhay Kewadkar, a freelance alcohol analyst, “before Sula entered the market, wine was considered aspirational — for individuals above 45 years of age.” “By concentrating on younger customers, they deftly altered that perspective.”

Winemaker Braves India IPO Market

The winemaker wants to go public at a time when IPOs has declined globally, including in India, due to worries about a recession. Plunges in high-flying software unicorns like Zomato Ltd. and Paytm parent One 97 Communications Ltd. have recently burnt young retail traders who helped push the local stock market over a previous couple of years, leaving them with little but regret.

After nearly tripling in the previous three years, the S&P BSE IPO Index, which tracks the performance of Indian shares for the first two years after listing, has lost 24 percent in 2022.

The anticipated sale of nearly a third of Sula’s equity, including shares held by founder and managing director Rajeev Samant, has not yet been priced. For the fiscal year that ended on March 31, the business reported sales of $57 million, or about one-tenth as much as Zomato and Paytm. Still, Sula is profitable in contrast to the other two internet companies.

According to Sula’s draught prospectus, the wine will only make up 1% of the $33 billion global market for alcoholic beverages that India would account for in 2020. The company forecasts total Indian wine sales of 3.4 million cases in 2025, an increase of 70% from the level in 2021, since it believes there is ample space for expansion.

The 55-year-old Stanford alumnus Samant has pushed to increase demand by encouraging wine tourism in Nashik, the production hub for Sula, which is regarded as India’s Napa Valley. The company believes that social media has also raised the profile of the wine and that Sula is one of the top 10 vineyards on Instagram in terms of followers.

Sula thinks the listing will increase company visibility and brand recognition even if it doesn’t raise any money from the IPO itself. Additionally, given that the company’s regional rivals include the unlisted Fratelli Wines and Grover Zampa Vineyards, it might have a ripple impact on the entire sector.

The wine industry will become more well-known because of this IPO, according to Ronak Soni, an analyst at Equirus Securities Pvt. It’s a rapidly expanding market.

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