Sula Vineyards, India’s largest wine maker, on Thursday debuted at ₹358 a share, just a rupee more than the IPO price of ₹357. The stock rallied to ₹363.40 within minutes, before falling to ₹339 on the BSE. It was last trading at ₹341.60 (at 1.18 pm), down 4.3 per cent. About 3.38 lakh shares have changed hands so far.

On the NSE, the stock was listed at ₹361, but it fell and was trading at ₹341.70 apiece, down 4.31 per cent. The traded volume is 64.83 lakh shares.

The IPO of Sula Vineyards was subscribed 2.33 times on the last day of the offer, helped by 4.13 times subscription from qualified institutional buyers (QIBs), 1.65 times from retail individual investors (RIIs), and 1.51 times from non-institutional investors (NIIs). As a part of the IPO process, Sula Vineyards had raised ₹288 crore from anchor investors ahead of the issue.

The entire ₹960-crore IPO was an offer-for-sale, where entities including promoter Rajeev Samant and Belgian investment firms Verlinvest and Cofintra participated.

Wine demand in India

bl.portfolio had recommended that investors with a long-term horizon can subscribe to this offer, though it isn’t cheaply priced.

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Sula Vineyards has overall market share of 52 per cent in the grape wine market and is also the category creator in the elite and premium wine segments. The company reported 10-25 per cent Ebitda margin over the last three years, resulting from a strong roster of brands, extensive distribution network, and security of long-term raw material contracts with farmers.

The share of wine in alcohol consumption in India is less than 1 per cent in comparison with the over 10 per cent global average, 20-50 per cent in European nations, and nearly 4 per cent in China. With per capita consumption of wine in India at less than 100 ml a year, the small-sized ₹1,345-crore wine market seems to have potential for far better penetration and growth.

For the IPO to pay off at Sula’s valuations, the projection for burgeoning wine consumption in India and Sula’s hold on market dominance must come good.