Tilaknagar Industries Limited (TI), a leading Indian-Made Foreign Liquor (IMFL) manufacturer, has announced a landmark acquisition that could reshape its position in the Indian alcoholic beverage market. The company has entered into a definitive agreement to acquire the Imperial Blue business division from Pernod Ricard India Private Limited for €412.6 million (approximately ₹4,150.00 crore).

Strategic Acquisition

The acquisition includes the Imperial Blue brand, which is the third-largest whisky brand in India by volume, with over 25 years of brand heritage. Imperial Blue reported sales of 22.4 million 9-litre cases across India and other markets, with a revenue of ₹3,067.00 crore.

Expanding Portfolio and Reach

This strategic move marks Tilaknagar Industries' foray into the whisky segment, the largest IMFL category in India. The acquisition is expected to significantly expand TI's distribution reach, reinforcing its evolution into a truly pan-India player with strong scale across both brandy and whisky.

Amit Dahanukar, Chairman and Managing Director of Tilaknagar Industries Limited, stated, "Having achieved leadership in the brandy segment, it is now time for us to broaden our portfolio and cater to India's diverse and evolving consumer base. This strategic acquisition allows us to enter the whisky category with one of the country's most trusted and admired brands."

Combined Strength

The combined entity is projected to have a volume of 34 million 9-litre cases. This acquisition positions Tilaknagar Industries as a major player in both the brandy and whisky segments, the two largest IMFL categories.

Financial Implications

To finance the transaction, Tilaknagar Industries plans to raise a mix of debt and equity. The company's board has approved raising funds up to ₹6,500.00 crore, comprising up to ₹2,500.00 crore in equity or equity-linked securities and up to ₹4,000.00 crore in debt securities.

Future Plans

Tilaknagar Industries aims to use Imperial Blue as a launchpad for a significant whisky premiumization journey, enabling the company to build a strong whisky portfolio across premium price points.

Regulatory Approval

The proposed transaction is subject to approval from the Competition Commission of India, with closure anticipated in about 6 months from signing the definitive agreement.

New Subsidiary

In a related development, Tilaknagar Industries has incorporated a wholly-owned subsidiary, "Grain & Grape Works Private Limited." This new entity will carry out the business of manufacturing and marketing alcoholic and non-alcoholic beverages.

Market Impact

This acquisition, the largest in the Indian alcoholic beverages space by an Indian company, is set to fast-track Tilaknagar Industries' whisky foray and strengthen its leadership with leading brands across Whisky and Brandy. It represents a significant step in the company's ambition to become a major player in the Indian alcoholic beverage market and potentially reshape the competitive landscape of the industry.

As Tilaknagar Industries embarks on this transformative journey, the Indian alcoholic beverage market is poised for an interesting phase of competition and innovation.

Tilaknagar Industries , a prominent player in the Indian liquor industry, is reportedly leading the race to acquire Pernod Ricard's Imperial Blue whisky brand in a deal estimated at ₹4,000.00 crore. This potential acquisition marks a significant move for Tilaknagar Industries as it seeks to expand its portfolio and market presence.

Acquisition Details

• Tilaknagar Industries is the front-runner to acquire the Imperial Blue whisky brand from Pernod Ricard.
• The deal is valued at approximately ₹4,000.00 crore.
• Funding for the acquisition is expected to be through a combination of debt and equity.

Company Developments

• Tilaknagar Industries' board is scheduled to meet on July 23 to consider a fund-raising proposal.
• The company currently holds cash reserves of around ₹107.00 crore.

Market Response

• Tilaknagar Industries' stock witnessed a surge of 8% on Tuesday, reaching ₹453.00.
• Over the past five trading sessions, the stock has gained more than 20%.

Industry Impact

The acquisition of Imperial Blue, if successful, could significantly strengthen Tilaknagar Industries' position in the Indian whisky market. Imperial Blue is a well-established brand, and its addition to Tilaknagar's portfolio could potentially boost the company's market share and revenue streams.

Company Statement

As of now, neither Tilaknagar Industries nor Pernod Ricard has officially commented on the potential deal. However, in a recent press release, Tilaknagar Industries addressed certain media reports unrelated to this acquisition. The company stated:

"Tilaknagar Industries is a company devoted to creating and marketing globally-acclaimed brands that are market leaders in their respective segments and geographies. All our brands stand on the strength of their intrinsic merit and unwavering consumer loyalty. As always, the company remains focused on maximising shareholder value through ethical business dealings and practices."

While this statement does not directly address the potential acquisition, it underscores the company's commitment to growth and ethical business practices.

Looking Ahead

Investors and industry watchers will be keenly observing the outcome of Tilaknagar Industries' board meeting on July 23, which could provide more clarity on the company's fund-raising plans and potentially shed light on the rumored acquisition. The liquor industry landscape in India could see a significant shift if this high-value deal comes to fruition.

As the situation develops, stakeholders are advised to stay tuned for official communications from Tilaknagar Industries and relevant regulatory bodies for accurate and up-to-date information.