Introduction
The name Sula is synonymous with the wine industry in India. It is a homegrown brand that also has international recognition. The company Sula Vineyards is now coming out with an IPO to be the first pure-play wine manufacturer to be listed on the stock exchange.
Sula Vineyards Limited IPO was open for subscription from 12th to 14th December 2022. IPO allotment is expected on Monday, 19th December. The latest GMP (grey market premium) of this issue is Rs. 10 and the issue was subscribed 2.33 times as of the last day of subscription.
Here are all the important details of Sula Vineyards Limited IPO, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
Read More: How to analyse a stock for investment?
IPO Details
The various details of the Sula Vineyards Limited IPO are as under.
- IPO Size
The size of the IPO and different categories of the issue are,
| Category | Details |
| IPO Opening Date | 12th December 2022 |
| IPO Closing Date | 14th December 2022 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face Value of shares | Rs.2 per share |
| IPO Price Band | Rs. 340 – Rs. 357 per share |
| IPO Size | Rs. 960.35 crores (2,69,00,530 shares) |
| Offer For Sale | Rs. 960.35 crores (2,69,00,530 shares) |
| Fresh Issue | – |
- IPO Dates
The important dates for the Sula Vineyards Limited IPO are highlighted below.
| Event | Date |
| Opening date | 12th December 2022 |
| Closing Date | 14th December 2022 |
| Allotment date | 19th December 2022 |
| Refund Date | 20th December 2022 |
| Share Credit Date | 21st December 2022 |
| Listing Date | 22nd December 2022 |
- IPO Lot Sizes
Investors can subscribe to the shares of Sula Vinyards Limited IPO in pre-defined lots. The details of the lot sizes for this IPO are mentioned below.
| Category | Details |
| Investment in lots (for retail investors) | Minimum – 1 lotMaximum – 13 lots |
| Shares | Minimum – 42Maximum – 546 |
| Investment amount | Minimum – Rs. 14,994Maximum – Rs. 1,94,922 |
- IPO Reservation
The categories of eligible investors and their share in the IPO are tabled below
| Category of Investor | Reservation Percentage |
| QIB (Qualified Institutional Buyers) | 50% |
| NII (Non-Institutional Bidders) | 15% |
| RII (Retail Individual Investors) | 35% |
Sula Vineyards Limited IPO Objectives
The key objectives of the IPO are stated below:
- The IPO is an Offer For Sale and hence all the proceeds from the IPO will be received by the promoters.
- The company aims to receive listing benefits from the IPO.
Top things to know about Sula Vineyards Limited IPO
‘Sula’ is the flagship brand of Sula Vineyards Limited (SVL) through which it operates its business within the country and internationally. The company’s business is broadly into two streams,
- Wine production and distribution along with the import of wine and distribution of the same in the Indian market
- Wine tourism service through the vineyards that are owned and operated under its brand name ‘Sula’ which includes vineyard resorts and wine tasting.
The company has more than 50% market share in the Indian wine industry and sales across approximately 35 countries. It has 56 labels under its name that are produced at 6 facilities in India in Maharashtra and Karnataka. 4 of these facilities are owned by the company and the remaining 2 are on lease. The popular wine brands of the company are ‘Rasa’, ‘Dindori’, ‘The Source’, ‘Satori’, ‘Madera’, and ‘Dia’. SVL also has the largest wine distribution network with 13,000 touch points across India as of 2021. The company’s D2C business channel is also a strong revenue generator through its wine tourism facilities in Nashik and Bengaluru.
Other highlights of the business include,
- Long-term supply contract with the grape growers of approximately 2,290 acres as of September 2022.
- A strong sales force of 141 employees.
- Distribution platform of over 50 distributors, 11 corporations, 14 licensed resellers, 3 defence units, and 7 company depots.
- Over 23,000 POS which includes 13,500 retail touchpoints, over 9000 in the HoReCa segment.
Financials of the company
Sula Vineyards Limited financials are given in the table below:
| Year | Total Assets (Rs. In crores) | Operating Revenue (Rs. In crores) | Profit after tax (Rs. In crores) | Basic EPS(Rs.) | Diluted EPS(Rs.) | RONW |
| Mar-2022 | 758 | 454 | 52 | 6.79 | 6.79 | 11.45% |
| Mar-2021 | 751 | 418 | 3 | 0.40 | 0.40 | 0.85% |
| Mar-2020 | 831 | 522 | -16 | -2.09 | -2.09 | -4.60% |
Strengths of the company
Some of the key strengths of Sula Vineyards Limited that investors can take note of are:
| Category | Details |
| Business model | The company has an established name in the wine industry in India and has a strong distribution network and efficient production mechanism that is backed by the most extensive sales presence across the country. Sula is the pioneer in the country’s wine tourism industry.The company has a wide range of products that are catered to a wide and diverse customer segmentThe company has secured long-term supply contracts that are exclusive for their brand ‘Sula’ directly from grape growers. |
| Industry | The company is in a high-barrier entry business but has developed a niche for itself that will be hard to beat. |
Risks of investment
Here are some of the risks that investors of Sula Vineyards Limited IPO should know:
| Category | Details |
| Business viability and profitability | The company has reported huge losses in the past 3 years The company’s business can be directly implicated by any changes in customer preferences, any changes in quality or quantity of grape production. State regulations also play an important role in the final pricing of the product. The company’s inability to adjust to the same will be adverse for its bottom line. |
| Competition | Any reduction in import duties will result in steep competition from foreign wine brands. Wine industry is subject to many regulations like licensing and changing excise regime |
What is the Grey Market Premium (GMP) on Sula Vineyards Limited IPO?
As of December 16th, 2022, the grey market premium for the shares of Sula Vineyards Limited is approximately Rs. 10 as per market observers.
Should you apply for Sula Vineyards Limited IPO?
The wine industry, although small in India has grown to great heights and has the potential to grow more in the future at an expected CAGR of 14% by volume and the brand name ‘Sula’ has a dominant market share of more than 52%. Although the company has reported losses in the past three years, the recovery of revenue and profits also has been good. The company is quite small compared to its listed peers like United Spirits Limited, United Breweries Limited, etc. but is fully priced based on its financial results. The IPO is, therefore, a good investment option for making listing gains and from a long-term investment perspective.
How to apply for Sula Vineyards Limited IPO?
Investors can invest in this IPO through the Fisdom app.
FAQs
The diverse business operations of Sula Vineyards Limited are producing, importing, and distributing wine under its brand name ‘Sula’ and wine tourism at its vineyards in Nashik and Bengaluru.
The RONW for Sula Vineyards stands at 11.45% and is in line with industry standards
The promoter share in the company post issue will stand at approximately 27.3%
The price band for Sula Vineyards Limited IPO is Rs. 340 – Rs. 375 per share.
The company is dependent on the raw material for its production and revenue and any fall in the quantity or quality of grapes sourced will directly impact the company’s profitability.
