Bira91 maker brews plans to tap capital market in 2026

New Delhi: B9 Beverages, maker of craft beer Bira91, is planning an initial public offering in 2026 and has roped in investment bank Morgan Stanley for the pre-IPO process, executives aware of the developments said. “We are planning our IPO in 2026. This is contingent on meeting operating milestones in the business,” Ankur Jain, chief executive and founder of B9 Beverages told ET. He declined to comment on the beer maker roping in Morgan Stanley.

The development comes amid supply shortages of Bira91 over the past few quarters across some of India’s largest spirits markets including Delhi, Karnataka and Haryana, profitability pressures, and a surge of competitors in the craft beer space.

“We had supply challenges in Q3 and Q4 of FY24 in some markets, which were largely due to three factors. We were rewiring our supply and sales planning processes for which we worked with BCG, which included market corrections of inventory. Secondly, there were name changes in the company, as we converted from ‘private limited’ to ‘limited’ which required us to refile regulatory paperwork for manufacturing licences and label registrations across states. Also, our own fundraises which got concluded in March-April 2024,” Jain said.

According to him, the supply issues have now been sorted across markets including Delhi which got resolved with licence renewals in July. “Only market remaining to be resolved is Haryana,” he said.

The listing plans, if successful, will happen a decade after launch. Bira91 was launched in 2015, with wheat beer and classic lagers. The beer maker adds to a series of consumer companies planning IPOs to tap a buoyant primary market.

For its last reported earnings, B9 Beverages widened its net loss to ₹445.4 crore in FY23, from ₹396 crore in FY22, according to filings with the Registrar of Companies. Revenues from operations grew 15% to ₹824 crore in FY23, from ₹719 crore in FY22. Total costs increased 14% to ₹1,282 crore from ₹1,122 crore during the period.

Jain said the company has undertaken “deep transformation across supply and sales processes”, improving variable margins from 25% over the last four years to over 43% over the past six months.

A senior liquor industry executive, who didn’t wish to be named, attributed the losses to heavy marketing spends, including its substantial sponsorship of the ICC Cricket World Cup and T20 World Cup tournaments and rapid expansion in overseas markets. This March, private equity firm Tiger Pacific Capital acquired about 4% in B9 Beverages for $25 million. The deal came weeks after Japanese beverages group Kirin Holdings raised its 20% stake in B9 Beverages also for $25 million. Peak XV and Belgium’s Sofina are the other investors in B9.

Overall investments in the craft beer maker over the past nearly two years total $130 million, including Kirin’s $70 million investment in November 2022, and Japan’s MUFG Bank’s $10 million infusion. Two years ago, B9 Beverages had acquired homegrown beer pub chain Beer Cafe in an all-cash deal.

“Some funding is equity and is being utilised to retire some of the debt (such as for Beer Cafe acquisition),” said executive cited above.