Allied Blenders And Distillers IPO- Investment Rationale, Issue Details, Financials, Risks & More: Anand Rathi

Anand Rathi Report

Allied Blenders and Distillers Ltd. will launch its initial public offering on June 25 and the offer will close for subscription on June 27. The largest Indian-owned Indian-made foreign liquor company has fixed the price band in the range of Rs 267-281. Minimum order lot is 53.

The Rs 1,500 crore comprises of a fresh issue of 3.56 crore shares worth Rs 1,000 crore and an offer for sale of 1.78 crore shares, totaling Rs 500 crore.

Object of fresh issue

1. Payment or repayment of a or portions of certain outstanding borrowings.

2. General Corporate purposes.

Valuation

The company is the largest Indian-owned IMFL (Indian Made Foreign Liquor) firm and ranks as the third largest IMFL company in India based on annual sales volumes from Fiscal 2014 to Fiscal 2022.

The company has various well-known brands namely, Officer’s Choice Whisky, Sterling Reserve, Officer’s Choice Blue. The company's P/E ratio is 1,405 times its FY24 annualized earnings, with a market capitalization of Rs 78,596 million after the issuance of equity shares and a market cap-to-sales ratio of 0.99 times its FY24 annualized earnings.

Allied blenders and distillers is one of the largest IMFL companies in India, offering a diversified and contemporary product portfolio. The company has built a well-recognized product portfolio, evolving from a single-brand entity to a multi-product, multi-brand firm with a presence across various categories and segments of the IMFL industry in India.

The company plans to use majority of its proceeds to pay down debt, which will lower finance costs and boost profit margins. Even though the issue is fully priced in near term, we believe the company has promising long-term business prospects.

Therefore, we recommend a 'Subscribe – Long Term' rating for the IPO.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.