Shares of Varun Beverages surged by 5% on November 14 after reports confirmed the launch of a ₹7,500 crore Qualified Institutional Placement (QIP) aimed at raising substantial funds. With a strategic approach to share market investment, this QIP has generated significant interest, boosting investor confidence in Varun Beverages.
Varun Beverages stock performance amid QIP launch
At 10:02 AM, shares of Varun Beverages traded at ₹586.65 on the NSE, reflecting a strong investor response to the QIP announcement. The QIP, initially approved by the company in October, is structured with a base deal size of ₹5,500 crore, with the option to expand by an additional ₹2,000 crore.
The indicative price has been set at ₹565 per share, offering a slight discount of less than 1% to the last closing price and a 5% discount to SEBI’s floor price. This move in the share market aligns with Varun Beverages’ broader share market investment strategy, attracting both retail and institutional interest.
Purpose of the ₹7,500 crore fund
As one of PepsiCo’s largest bottlers globally, Varun Beverages aims to utilise the funds from this QIP to strengthen its existing ventures and explore new growth areas.
The capital raised will be allocated for investments in subsidiaries, joint ventures, and associates, helping to fuel growth in existing operations and expand the company's product portfolio. These funds will also support Varun Beverages in entering new territories and pursuing strategic acquisitions—a critical aspect of its share market investment outlook.
Financial performance and quarterly earnings
Varun Beverages' recent financial performance highlights the company's growth trajectory. For the latest quarter, the firm posted a net profit of ₹619.6 crore, a significant rise from ₹501 crore in the corresponding period last year.
This increase was supported by a robust 24% revenue growth to ₹4,805 crore, driven by expanded distribution, enhanced product penetration, and high demand in key markets. This performance underscores the firm’s focus on share market investment strategies that enhance profitability and market share.
Recent acquisitions in Africa expand global footprint
In line with its share market investment strategy, Varun Beverages has also made notable acquisitions in Africa. Earlier this week, the company finalised its acquisition of SBC Tanzania for ₹1,304 crore and SBC Beverages Ghana for ₹127.1 crore, securing full ownership of both companies.
This expansion into Africa will further solidify its presence in international markets and diversify its revenue streams, an approach expected to benefit its long-term share market investment strategy.
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