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Varun Beverages Opens ₹5,500 Crore QIP, Sets Floor Price at ₹594.56

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Synopsis:

Varun Beverages launches ₹5,500 crore Qualified Institutional Placement with a floor price of ₹594.56 per share. The move may dilute equity by 4.1%, with earnings and margins seeing significant growth.

Varun Beverages news today

Varun Beverages Ltd, a prominent bottler for PepsiCo, launched its Qualified Institutional Placement (QIP) today. The base deal size for the QIP is ₹5,500 crore, with an option to upsize by ₹2,000 crore, potentially bringing the total to ₹7,500 crore. The SEBI-mandated floor price has been set at ₹594.56 per share, while the indicative price is ₹565, reflecting a slight discount. The equity dilution for this issuance is expected to be around 4.1%.

VARUN BEVERAGES LIMITED

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626.75-3.59 (-0.56 %)

Updated - 21 November 2024
630.00day high
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VOLUME (BSE)

Key Takeaways:

  • Base QIP Size: ₹5,500 crore, expandable to ₹7,500 crore.

  • SEBI Floor Price: ₹594.56 per share.

  • Indicative Price: ₹565 per share.

  • Equity Dilution: Approximately 4.1%.

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Strong Financial Performance Boosts Investor Confidence

Varun Beverages’ robust Q3 FY24 financial performance aligns with the timing of the QIP. The company posted a net profit of ₹619.6 crore, marking a 23.6% year-on-year increase. Revenue surged by 24% to ₹4,805 crore, driven by expanded distribution and increased demand in key markets. EBITDA rose by 30% to ₹1,151 crore, with margins improving from 22.8% to 24%.

Also read: Cipla Receives US FDA Form 483 with Eight Observations at Bengaluru Unit

Financial Highlights for Q3 FY24

Metrics

Q3 FY24

Q3 FY23

YoY Growth

Net Profit (₹ crore)

619.6

501.0

23.6%

Revenue (₹ crore)

4,805

3,874

24%

EBITDA (₹ crore)

1,151

886

30%

EBITDA Margin (%)

24%

22.8%

+100 bps

Gross Margin (%)

55.5%

55.3%

+22 bps

Implications for Varun Beverages Share Price

The QIP launch is expected to impact Varun Beverages share price in the short term due to equity dilution. However, the company's strong financial performance and expanding market presence could sustain long-term investor confidence. The discounted indicative price may attract significant institutional participation.

The QIP reflects Varun Beverages’ strategic approach to scaling operations while leveraging its improved earnings performance. Investors will closely monitor the outcome of this fundraising initiative and its implications for Varun Beverages share price in the coming quarters.

Also read: Morgan Stanley Acquires 1.4 Crore PNB Housing Finance Shares for ₹1,336 Crore

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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