Indiabulls Will Provide Loan To Jagatjit Industries Of Rs 265 Crore
Jagjitjit, who made Aristocrat whiskey, has adopted a debt-re-financing path to repay its old debt and bring it back on track. Jagatjit Industries has made a debt-financing deal of Rs 265 Crore with Indiabulls Commercial Credit Limited. Lenders of the 73-year-old distillery company include American private equity fund KKR and Union Bank of India and. KKR had a debt restructuring deal worth more than Rs 200 Crore last year.
Jagatjit Industries promoter, Roshini Sanah Jaiswal said, “We are capable of repaying this debt further. This will give us the compulsory funds to grow. Our growth has been affected due to internal reformation. in spite of the new funds coming in, the company’s total debt is similar to the previous year, but we have significantly reduced the burden of interest. In the second phase of this deal, the load of interest will be reduced and more funds will be available for working capital.”
Jagatjit Industries was started in 1944 by LP Jaiswal in the Kapurthala State ruled by Maharaja Ranjit Singh. In the last few months, the company has balanced its portfolio to increase profitability, and in some states, its business is ready. Among them one of the major markets is Kerala. This has affected the company’s sales in the last financial year. Its volume had come down by 24% and turnover dropped by 27% to Rs 846 Crore. The company suffered a loss of Rs 119 Crore in the last financial year. However, from the last two quarters, it has been positive in the case of EBIDTA.
About 35 Million cases of spirits are consumed annually in the country. This is the second largest market in the world in terms of volume after China. Last year, the growth was almost flat. This was due to the ban by the Supreme Court on the sale of alcohol near the highway. This decision led to shutting many liquor shops. Besides, in some states, there has been an impact on the sale of alcohol and excise duty.
Jagatjit Industries sells brands such as AC, Binnies, Bonnie and IICE Vodka. In the total spirits market of the country, it has a 3.5% share in volume terms. The company is expected to return its business back to its current financial year. Jaiswal said, “There is a good demand for our brands, but we did not have the necessary working capital to increase the sales of brands. Now we are focusing on bringing operational executives and launching new brands.”
Jagatjit Industries shares fell 2.6% to Rs 112.5 on Wednesday on BSE.