Allied Blenders and Distillers IPO booked 51% on Day 1. Check GMP and other details

The initial public offer (IPO) of Allied Blenders & Distillers (ABDL), which opened for subscription today, has been booked 51% on the first day of the bidding process.

Non-institutional investors are driving the demand with a subscription of 87%, followed by retail investors, whose category was booked by 63%.

The issue is a combination of fresh equity sale of Rs 1,000 crore and an offer for sale (OFS) of 1.77 crore shares.

Under the OFS, promoters Bina Kishore Chhabria and Resham Chhabria Jeetendra will offload part of their stakes.

The proceeds from its fresh issuance will be utilized for prepayment or scheduled repayment of a portion of certain outstanding borrowings and balance for general corporate purposes.

Allied Blenders and Distillers IPO GMP

In the grey market, the company's shares are trading with a premium of 27% unchanged from the previous day.

Also Read: A bet on Allied Blenders may take longer to give a high

Allied Blenders and Distillers IPO review

While Allied Blenders and Distillers boasts a strong brand presence, a diverse product portfolio, and an extensive pan India distribution network, analysts are cautious about investing in the IPO.

"The company's financial performance has been volatile, characterized by low-profit margins and high debt levels. Additionally, the Indian Made Foreign Liquor (IMFL) industry faces intensifying competition, potential tax hikes, and a highly regulated environment. Additionally, the current IPO valuation appears exceptionally high, with a P/E of 4014x. Given the aforementioned risks and the high valuation, we recommend avoiding the IPO," said Swastika Investmart.

Allied Blenders and Distillers IPO price band

The company has priced the issue in the range of Rs 267-281 per share, where investors can bid for 53 shares in one lot.

About 50% in the public offer is reserved for qualified institutional buyers, 35% for retail investors and the rest 15% for non-institutional investors.

Other details

With a market share of over 8% in India made foreign liquor market by sales volumes in fiscal 2023, Allied Blenders and Distillers is engaged in the manufacturing, marketing and sale of alcoholic beverages in India and abroad. The product portfolio of the firm comprises several brands of IMFL across whisky, brandy, rum and vodka.

Over the years, the company has expanded and introduced products across various categories and segments, having successfully leveraged its strength in the popular segment to launch successful brands.

The company has also shifted its focus from mass premium whisky segment to premiumization, with the launch of brands like ICONiQ White Whisky, Srishti Whisky, and X&O Barrel Whisky.

For the nine months ended December 2023 period, the company clocked revenue growth of 9% year-on-year at Rs 5,915 crore. Meanwhile, the profit after tax in the same period increased 50% year-on-year to Rs 4.2 crore.

ICICI Securities, Nuvama Wealth Management, and ITI Capital are acting as the book running lead managers to the issue.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)


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