SAIF, Aditya Birla Private Equity invest Rs 80 crore in Manpasand Beverages

MUMBAI: South Asia-focused private equity firm SAIF Partners is increasing its stake in Gujarat based Manpasand Beverages ahead of the company’s planned initial public offering (IPO), three people with direct knowledge of the development said. SAIF Partners, along with Aditya Birla Private Equity, is investing Rs 70-80 crore in a pre-IPO round of fund raising by the company in a transaction that values Manpasand Beverages at Rs 1,000 crore.
"The company has raised Rs 80 crore ahead of its proposed IPO.

The company will come out with the issue by next financial year," an investment banker with knowledge of the development said.

Vishal Sood, managing director of SAIF, confirmed the investment. "We have invested just over Rs 70 crore along with Aditya Birla PE.

Post the investment, SAIF holds just under 30% stake in the company."

Manpasand Beverages manufactures the Sip brand of fruit juices in mango, apple and other flavours.

SAIF Partners, which manages more than $3 billion in the South Asian markets, had invested $10 million in Manpasand in 2011 for a significant minority stake.

"The fund is very keen on retaining some stake post the public issue and hence, has increased its stake ahead of the IPO," another person involved in the deal said.

The company has appointed investment banks Kotak Mahindra Capital and India Infoline to manage the IPO.

Aditya Birla Private Equity will roughly own a stake of around 5% in the company after the transaction. "The company plans to raiseRs 250 crore through its public offering. SAIF will partly exit its stake in the company."

Bharat Banka, the chief executive of Aditya Birla PE, could not be reached for comment.

Manpasand manufactures mango juices mainly at plants in Vadodara, Varanasi and Dehradun.

The company is looking at raising capital through the IPO for further capacity expansion. It is planning to set up more factories and expand the Varanasi facility.

The new plants will be located at Vadodara, Bangalore and the Bengal-Bihar border.

Manpasand Beverages has a total capacity of 75,000 cases per day, which the company is looking to double in three years.

"We had initially focused on tier-II and tier-III markets, which were our target markets. There is still a great supply gap in those markets," Dhirendra Singh, the company’s managing director and founder, told ETin an interview in May.

Manpasand is expected to earn revenue of around Rs 500 crore in FY15, up from about Rs 300 crore in the previous year.

The firm has been able to build a strong network in small towns and rural markets, where the majority of its revenue comes from.

With the equity capital markets booming, private equity-backed companies will be looking to tap the markets through public issues.