Sula Vineyards Tumbles 8% Amid Reports Of Likely Block Deal; Details

In Monday’s early morning trade, Sula Vineyards, India’s largest wine producer, experienced a 7.60 per cent decline in its share value, dropping to Rs 570.60 per share. This came after equity stake worth Rs 676.6 crore in the wine-maker was offloaded through an open-market transaction. About 1.16 crore shares, representing 13.76 per cent equity stake, was sold at an average price of Rs 579 per share.

Verlinvest Asia was looking to offload its entire stake in Sula Vineyards through large deals in the open market. The institutional investor currently owns an 8.34 per cent stake in the company.

The floor price was at a discount of nearly 5 per cent to Friday’s closing price of Rs 610 on the NSE. On Monday, the stock was trading 7.20 per cent higher at Rs 573.10 apiece on NSE.

Kotak Mahindra Capital is reported to be the broker for the deal.

Sula Vineyards, which made its stock market debut in December 2022, has risen more than 86 per cent since its listing. The stock is up 16 per cent so far this year and 50 per cent in the last one year.

Belgium-based Verlinvest is also an investor in India’s Wakefit, Epigamia, Veeba, Purplle and Byju’s, among other lifestyle and fast-moving consumer goods companies.

Apart from Verlinvest, some of the other foreign investors in the company include Jupiter India Fund, Goldman Sachs and Abu Dhabi Investment Authority. Promoters held a little over 26 per cent stake in the company as of December-end.

Sula Vineyards has reported a more than 9 per cent rise in third-quarter profit, helped by increased demand for its premium brands and wine tourism business. The Mumbai-headquartered company said its consolidated net profit rose to Rs 42,98 crore in the quarter.

Its wine segment, which houses premium brands such as Dindori and Rasa, reported a nearly 4 per cent rise in revenue during the quarter. This is Sula’s biggest segment and accounts for 89 per cent of the topline.

Its smaller wine tourism segment, logged an 16 per cent rise in revenue as more people visited the company’s vineyards, located in the cities of Nashik and Bengaluru, especially over the long Christmas weekend.

Total revenue rose 4 per cent to Rs 218 crore, the company said.

Its margins on earning before interest, tax, depreciation and amortization (EBITDA) expanded to 33.7 per cent from 31 per cent a year ago. Additionally, Sula declared an interim divided of Rs 4 per share for the financial year 2024.