Allied Blenders and Distillers IPO Review

Allied Blenders and Distillers Limited is the largest Indian-owned Indian-made foreign liquor (“IMFL”) company and the third largest IMFL company in India, in terms of annual sales volumes between Fiscal 2014 and Fiscal 2022. We are one of the only four spirits companies in India with a pan-India sales and distribution footprint, and a leading exporter of IMFL, and had an estimated market share (in terms of sales volume) of 11.8% in the Indian whisky market for Fiscal 2023. Certain of our brands, such as, Officer’s Choice Whisky, Sterling Reserve, Officer’s Choice Blue and ICONiQ Whisky, are ‘Millionaire Brands’ or brands that have sold over a million 9-litre cases in one year.

The Company have a professional and experienced Promoters named Kishore Rajaram Chhabria, who have a experience of nearly 19 years in the field of management. Other Key Members includes Shekhar Ramamurthy, who holds 33 years of experience in various roles, including marketing, corporate planning and sales. Prior to joining our Company, he was associated with United Spirits Limited and United Breweries Limited.

Financially, Allied Blenders and Distillers Limited revenue increased from ₹63978.12 Million in FY21 to ₹72081.65 Million in FY22, and decreased to ₹71167.49 in FY23, and currently at ₹59,149.78 Million for 9MFY24. Whereas, EBITDA decreased from ₹2129.96 Million in FY21 to ₹2075.51 Million in FY22 and further decreased to ₹1960.61 Million in FY23 and currently at ₹1862.01 Million. The PAT also decreased from ₹25.08 Million in FY21 to ₹14.76 Million in FY22, but increased thereafter to ₹16.01 Million in FY23 and further to ₹42.29 Million for 9MFY24 as well. This doesn't indicates steady growth in financial performance.

For the Allied Blenders and Distillers Limited IPO, the company is issuing shares at a pre-issue EPS of ₹0.07 and a post-issue EPS of ₹0.06. The pre-issue P/E ratio is 4014x, while the post-issue P/E ratio is 4683x against the industry P/E ratio of 30.81x. The company's ROCE for 9MFY24 is 24.35%, and ROE for 9MFY24 is 1.03%. These metrics suggest that the IPO is fully priced.

The Grey Market Premium (GMP) indicates potential listing gains of 0%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid the IPO for listing gains or long term Investment purposes.