Sula Vineyards Ltd IPO: All You Need to Know


Here’s a special IPO for all you wine lovers out there! Popular winemaker Sula Vineyards Ltd has launched its initial public offering (IPO) today— Dec 12. In this article, we’ll dive into the company and its IPO.

Company Profile - Sula Vineyards Ltd

Sula Vineyards Ltd (SVL) is India’s largest wine producer and seller as of March 31, 2022 (FY22). It’s been a market leader (with >50% share) in our country’s wine industry in terms of volume and sales value since the financial year 2008-09. The company’s business can be classified into two:

  1. Production, distribution, and import of wines & spirits.
  2. Sale of services from its wine tourism venues, including vineyard resorts & tasting rooms.


  • SVL distributes white, red, and sparkling wines under its flagship brand ‘SULA’. It also offers wines under the RASA, Dindori, The Source, Satori, Madera, and Dia brands. 
  • The company produces 56 different wine labels at four owned and two leased production facilities in Maharashtra and Karnataka. [These states offer subsidies for grape production and tax rebates on wine.]
  • The company leads the market in all four price segments: 'Elite' (₹950+), 'Premium' (₹700-950), 'Economy' (₹400-700), and 'Popular' (₹400). In FY22, it had a market share of nearly 61% in the 'Elite' and 'Premium' segments (in terms of sales value).
  • It has built the largest distribution network among Indian wine companies, with nearly 13,000 retail touchpoints
  • They have entered into long-term supply arrangements (of up to 12 years) with grape growers for 2,290 acres as of September 30, 2022.
  • SVL offers its services across 8,000 hotels, restaurants, and caterers.

Sula’s wines and vineyards have a huge fan following on social media!

About the IPO

Sula Vineyards Ltd’s public issue opens on December 12 and closes on Dec 14. The company has fixed ₹340-357 per share as the price band for the IPO.

The IPO is purely an offer for sale (OFS) of 2.69 crore equity shares by promoters and early investors, aggregating to ₹960.35 crore. Individual investors can bid for a minimum of 42 equity shares (1 lot) and in multiples of 42 shares thereafter. You will need a minimum of ₹14,994 (at the cut-off price) to apply for this IPO. The maximum number of shares a retail investor can apply is 546 equity shares (13 lots).

The primary objective of the IPO is to provide an exit strategy (or liquidity) for SVL’s promoters. The company aims to achieve the benefits of listing the equity shares on NSE and BSE. The total promoter holding in Sula Vineyards will decline from 28.44% to 27.33% post the IPO.

[The low promoter holding is quite concerning— could indicate that promoters may not have much faith in the company's future prospects.]

Financial Performance

After posting a loss of ₹15.94 crore in FY20, Sula Vineyards turned profitable with healthy EBITDA margins over the next two years. Its revenue fell nearly 20% YoY in FY21 and increased by 8.6% YoY in FY22. Off-trade sales contributed 72.25% of SVL’s secondary sales during FY22, compared to 61.33% in FY20. SVL has been able to reduce its total borrowings from ₹368.24 crore in FY20 to ₹228.93 crore in FY22.

In the half-year period ended September 2022 (H1 FY23), profit jumped 577% YoY to ₹30.5 crore, and revenue rose 40.8% YoY to ₹224 crore.

Risk Factors

  • All companies operating in India’s alcohol industry are subject to strict licensing and excise regimes. SVL’s business and financial performance could be severely affected due to changes in regulations, tax laws, and legal uncertainties.
  • Any adverse climatic conditions may impact the quality of wine grapes (SVL’s key raw material). 
  • Consumers’ tastes and preferences may change, and they may not prefer wines in the future. SVL’s sales could decline if it fails to adapt to changing market trends and consumer spending patterns. The company may also not be able to maintain its competitive position in the alcohol/wine industry. 
  • The company benefits from high duties imposed on imports of international wines in India. These duties could be reduced or eliminated in the future, adversely impacting SVL’s wine business.
  • SVL depends heavily on its brand portfolio. The success of its business strategy depends on its ability to enhance brands.

IPO Details in a Nutshell

Sula Vineyards filed the Red Herring Prospectus (RHP) for its IPO on Dec 5. You can read it here. Out of the total offer, 50% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.

Ahead of the IPO, SVL raised ₹288.10 crore from anchor investors. The marquee investors include Abu Dhabi Investment Authority (ADIA), Goldman Sachs, Morgan Stanley, BNP Paribas Arbitrage, and Citigroup Global Markets Mauritius.


Let’s look at some facts: Of the ₹2.4 lakh crore alcoholic beverage market, wine only has a mere 1% share! The per capita consumption of wine in India is just 40 ml per year. Even then, Sula has been able to make its wines appealing to Indians, mostly millennials. They’re the pioneer of wine tourism in India. It launched the first wine tasting room in India, the first vineyard resort, the first wine music festival, and the first winery tours at its facility in Nashik! 

Going forward, SVL will continue to focus on its own brands over third-party brands that they import and distribute. It will leverage its distribution capability to launch new products under the ‘Elite’ and ‘Premium’ categories to increase revenue and market share in the Indian wine market.

SVL will be facing competition from listed peers such as United Spirits, Radico Khaitan, and United Breweries. Fratelli and Grover Zampa are two of Sula Vineyards' unlisted domestic rivals.

The company has received some interest from investors in the grey market. SVL’s IPO shares are trading at a premium of ₹34 in the unofficial market. Before applying to this IPO, we will wait to see if the portion reserved for institutional investors gets oversubscribed. Do consider the risks associated with the company and come to your own conclusion.

What are your views on Sula Vineyards Ltd’s IPO? Will you apply for it? Let us know in the comments section of the marketfeed app!

Post your comment

No comments to display

    Honeykomb by BHIVE,
    19th Main Road,
    HSR Sector 3,
    Karnataka - 560102

    Crafted by Traders 🔥© marketfeed 2023