Varun Beverages, a subsidiary of Ravi Jaipuria-led Beercafe, has extended the deadline for the acquisition of PepsiCo’s Ghana bottling operations to March 31, 2023. The Indian beverage company had initially planned to complete the deal by December 31, 2022, but has now pushed it back by three months.

The reason for the extension is reportedly due to certain regulatory and governmental hurdles that need to be cleared before the deal can be finalized. The acquisition is expected to be one of the largest in the African market, with a potential annual value of over $100 million.

Varun Beverages, which has a significant presence in India, has been expanding its operations across the globe, including in Africa, Southeast Asia, and the Middle East. The company has also been focused on diversifying its product portfolio, with a range of soft drinks, juices, and water-based beverages.

The acquisition of PepsiCo’s Ghana bottling operations is seen as a strategic move by Varun Beverages to strengthen its presence in the West African market. The operation, which is one of the largest bottling plants in Ghana, produces and distributes a range of beverages, including Pepsi, 7 Up, and Mirinda, among others.

The deal is also expected to create job opportunities and generate revenue for the Ghanaian economy. The plant currently employs over 500 people and is a significant employer in the country.

The extension of the deadline will allow Varun Beverages to finalize the regulatory approvals and complete due diligence, ensuring a smoother transition of the business. The company has already received necessary regulatory approvals from the Ghanaian government, and the deal is expected to be completed by the end of March 2023.

The acquisition is a significant milestone for Varun Beverages, marking its entry into the Ethiopian market, which has been a key focus area for the company. The deal is expected to be a game-changer for the company, providing it with a strong foothold in the African market and enhancing its global footprint.

The ownership structure of a company can be significantly impacted by changes in promoter holdings, which can signal shifts in business outlook, strategic realignments, or capital-raising efforts. The 2024 December quarter saw some notable declines in promoter holdings, indicating potential changes in ownership structures. To identify the top 10 companies where promoters have offloaded their stakes the most, Kotak Institutional Equities analyzed the data and presents the following list:

1. Radico Khitive (down 12.33%)
2. Brigade Enterprises (down 11.64%)
3. Aster India (down 10.86%)
4. Jain Irrigation Systems (down 10.58%)
5. Precision Warehousing (down 10.36%)
6. Manappuram Finance (down 9.72%)
7. TM International (down 9.41%)
8. HDIL (down 9.18%)
9. Praj Industries (down 8.82%)
10. Alok Industries (down 8.54%)

These top 10 companies show a collective decline in promoter holdings of 94.53%, according to data from Kotak Institutional Equities. This is a significant change, indicating potential adjustments in their respective business outlooks and ownership structures. Further analysis and research can be conducted to better understand the underlying reasons for these changes and how they may impact the companies in the short and long term.

Varun Beverages Ltd. (VBL) is set to announce its financial results for the December 2024 quarter, marking its fourth-quarter earnings release. As a leading bottler of PepsiCo, a partnership that dates back to the 1990s, VBL has expanded its business significantly over the years. With a presence in several countries, it is now one of the largest bottlers outside of the United States. VBL manufactures, distributes, and sells a range of beverages, including carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), under PepsiCo’s trademarks.

VBL’s CSD portfolio includes popular brands such as Pepsi, Mountain Dew, Sting, and Mirinda Orange, among others. Its NCB offerings feature Tropicana Slice, Tropicana Juices, and other products. With a market capitalization of around Rs 1.9 lakh crore, VBL’s financial results are eagerly anticipated for the quarter.

As a major bottler of PepsiCo, VBL’s performance will likely be closely tied to the global beverage giant’s fortunes. Therefore, investors and analysts will scrutinize the company’s quarterly results for indications of its ability to maintain its strong sales and revenue growth. Given its long-standing partnership with PepsiCo and its significant market presence, VBL’s financial performance will be closely watched, and insights into its Q4 results will provide valuable insights into the company’s future prospects. With the results scheduled for release, analysts will be keenly awaiting the outcome, which is expected to shed light on the company’s financial health and growth trajectory.

Varun Beverages, a major player in the breweries and distilleries sector, has been downgraded to a “Sell” rating by MarketsMojo as of January 21, 2025, due to its flat financial results for Q2 FY24-25. Despite a 48.01% increase in interest to Rs 247.70 crore, the company’s return on capital employed (ROCE) has fallen to 23.42%, and its debt-equity ratio has risen to 0.79 times. The promoter stake has decreased to 60.2%.

Although Varun Beverages reported a 27.2% profit increase year-over-year, its valuation appears expensive with an enterprise value to capital employed ratio of 12.7. The company’s technical trend also indicates a sideways movement, suggesting a lack of clear price momentum.

Varun Beverages remains the largest entity in its sector, accounting for 45.35% of the industry and annual sales of Rs 18,986.54 crore, representing 33.99% of the sector’s total. However, its recent financial performance and valuation metrics suggest that it may not be a good investment opportunity at present.

Varun Beverages, a subsidiary of Ravi Jaipuria’s RJ Corp, has invested ₹413 crore in its South African subsidiary, Varun Beverages (Pty) Ltd, to pay off debts and strengthen its financial position. The investment is aimed at reducing the company’s debt burden and improving its financial performance. Varun Beverages (Pty) Ltd is a leading beverage player in South Africa, with a portfolio of brands including Coca-Cola, Fanta, Sprite, and Kinley. The company has been facing financial challenges due to high debt levels and the impact of the COVID-19 pandemic on its business. With this investment, Varun Beverages aims to improve its cash flow and enhance its competitiveness in the market. The move is also expected to support the company’s expansion plans in South Africa and other African markets. The investment is a significant step towards strengthening Varun Beverages’ financial position and positioning it for long-term growth.

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Varun Beverages, a leading PepsiCo franchisee, is investing $50 million in a state-of-the-art Pepsi production facility in Kiswishi City, Democratic Republic of the Congo. The facility, located in the country’s first private Special Economic Zone (SEZ), will create thousands of jobs and expand PepsiCo’s brands in the region. The investment is one of the largest consumer-focused foreign direct investments (FDI) in the DRC’s history.

The facility will be built on 15 hectares of land and will have easy access to the rapidly growing population of Lubumbashi and the Haut-Katanga Province. The Kiswishi City SEZ is a project by Rendeavour, Africa’s largest new city builder, which has already catalyzed billions of dollars in foreign and domestic investment and created tens of thousands of jobs.

The investment demonstrates Varun Beverages’ confidence in the Congolese market and commitment to sustainable manufacturing. The SEZ’s secure and predictable business environment has attracted other businesses, including Congo Petrol and Queen Energy, and has contributed to the country’s economic growth.

Varun Beverages (VBL), a leading bottling partner of PepsiCo, has completed a US$890 million equity offering. Hogan Lovells advised VBL on the offering, which was a significant milestone for the company. As PepsiCo’s second-largest bottling partner outside the United States, VBL is a significant player in the global beverage industry. The equity offering will help the company to further strengthen its position in the market and support its growth strategies. The transaction is a testament to the company’s success and the confidence of its investors in its future prospects. With this offering, VBL is well-equipped to navigate the competitive landscape of the beverage industry and drive growth for years to come.