Coca-Cola plans $1 billion IPO for Indian bottling unit HCCB this year

Coca-Cola has engaged investment bankers at Kotak, HDFC Group, and Citibank for a proposed initial public offering (IPO) of its Indian bottling company, Hindustan Coca-Cola Beverages (HCCB), targeting to raise $1 billion (approximately ₹9,027 crore). The world's largest beverage maker is planning the listing for summer, with company valuation estimated at close to $10 billion.

IPO Timeline and Market Context

The listing plans remain on track for this year, though executives indicate potential postponement to next year if peak summer demand faces significant impact from rains, similar to last year's challenges. This IPO follows recent major market debuts by multinational consumer companies, including Hyundai Motors India's record $3.30 billion IPO and LG Electronics' $1.30 billion listing, both completed over 2024 and 2025.

Strategic Restructuring and Partnership

The IPO cycle began over a year ago when Coca-Cola sold 40% stake in Hindustan Coca-Cola Holdings Pvt Ltd, HCCB's parent entity, to Jubilant Bhartia Group for ₹12,500 crore. This strategic move aligns with Coca-Cola's global asset-light approach, focusing on strategy, innovation, brand building, and digitization rather than direct ownership of capital-intensive bottling operations.

Jubilant FoodWorks, which holds exclusive franchise rights for Domino's Pizza, Popeyes, and Dunkin' Donuts in India, brings potential synergies between beverages and quick service restaurant chains through this partnership.

Financial Performance and Operations

HCCB reported significant financial changes in FY25, reflecting its strategic restructuring:

The revenue decline resulted from the sale of manufacturing plants to existing independent franchise bottling partners across multiple territories, including Rajasthan, Bihar, the North East, and parts of West Bengal. The plants were sold to three major existing bottlers: Moon Beverages, Kandhari Global Beverages, and SLMG Beverages.

Market Position and Product Portfolio

Coca-Cola leads India's ₹60,000 crore soft drinks market through its diverse product portfolio. The company manufactures, sells, and distributes multiple beverage categories:

• Aerated drinks: Coca-Cola, Thums Up, Sprite
• Juices: Maaza
• Water brands: Kinley, Dasani
• Other beverages: Georgia coffee, Schweppes mixers

The India operations span 15 plants through HCCB and multiple independent bottlers, with operations split evenly between the two structures.

Industry Outlook and Consolidation

The beverage industry faced challenges during April-September last year due to unseasonal rains affecting peak summer demand, with April-June typically accounting for half of annual soft-drink sales. However, analysts project significant upside for the food-beverage-restaurant space, driven by large consolidation and consumer demand revival after five quarters of tepid growth.

Recent industry consolidation includes the January 1 merger between Devyani International and Sapphire Foods, bringing together KFC and Pizza Hut operations under Devyani International to jointly operate over 3,000 stores. JP Morgan analysts noted this merger creates a simplified structure with potential for meaningful cost savings and quicker decision-making.

Leadership and Company Response

HCCB appointed Hemant Rupani as chief executive in July last year, succeeding Juan Pablo Rodriguez. Rupani previously served as president for Southeast Asia at chocolate maker Mondelez. An HCCB spokesperson emphasized the company's focus on driving operational excellence with its realigned leadership team, while noting benefits passed to consumers through new GST-led pricing for better value and affordable choices.