28.1 C
New Delhi
Thursday, November 14, 2024

Bhartia Family, Goldman Sachs in talks for 40% stake in Hindustan Coca-Cola Beverages

Published:

The Bhartia family, led by brothers Shyam and Hari, is in advanced negotiations with Goldman Sachs to acquire a 40% stake in Hindustan Coca-Cola Beverages (HCCB), Coca-Cola’s wholly-owned bottling arm in India. Goldman Sachs is expected to finance the deal through a convertible preferred equity instrument worth INR 3,000-3,500 crore.

Investment to route via Goldman Sachs Alternatives

According to sources, the Bhartia family will also invest a similar amount, with Goldman Sachs capping their upside on the investment at 20% IRR with downward protection. The investment will be routed through Goldman Sachs Alternatives, the firm’s growth and private equity arm.

Continue Exploring: Amul sets course for Europe following successful US launch

Meanwhile, the deal is seen as a precursor to HCCB’s initial public offering (IPO), expected within two to three years. Coca-Cola aims to replicate rival PepsiCo‘s asset-light model, outsourcing bottling operations to unlock value.

“Hindustan Coca-Cola Beverages is lining up a $1.5 billion capital expenditure program over five years,” a source revealed. “This includes plans to invest INR 3,000 crore in a juice and aerated drinks facility in Gujarat and INR 350 crore in a new plant in Madhya Pradesh.”

HCCB reports revenue jump to INR 14,021 Cr

Further, HCCB reported a 9.2% jump in FY24 revenues to INR 14,021 crore, with net profit soaring 247% to INR 2,808.3 crore. The company operates 13 factories across India, manufacturing 37 products across eight categories.

Continue Exploring: Nykaa targets 2-hour delivery for key products, moves from 10-minute model

Additionally, the Bhartia family, known for their pizza-to-pharma conglomerate, has been in discussions with alternative asset managers and foreign banks to raise over $1 billion in financing.

“Goldman Sachs is betting on growing beverage consumption in India,” a source said. “The firm’s alternatives platform has backed several high-growth companies in India, including Biocon Biologics and API Holdings.”

In a recent development, Morgan Stanley is advising the Bhartia family on the debt capital raise from mutual funds, running parallel to the Goldman negotiations.

Subscribe to our Newsletter!

Stay updated on the latest news, trends, and top startups with Snackfax's daily newsletter!

Related articles

Recent articles

× Drop a, Hi?