Jubilant Bhartia Group: Jubilant’ Bhartia’s Rs 5,650 cr NCDs for coke bottler stake oversubscribed 1.9 X as AMCs double down

Mumbai: Mumbai: Leading asset management firms, led by HDFC AMC, snapped up the two sets of non-convertible debentures (NCDs) issued by the Jubilant Bhartia Group to raise Rs 5,650 crore to part-fund its acquisition of a 40% stake in Hindustan Coca-Cola Holdings, the parent of Coca-Cola’s largest bottling business in India.

The bond offerings, made via two group entities, saw bids totalling Rs 10,610.84 crore, nearly 1.9 times the intended amount, according to people familiar with the matter, underscoring the appetite of mutual funds to buy into such papers.

Jubilant Beverages Ltd, which targeted Rs 2,650 crore, received bids worth Rs 5,840 crore against a non-anchor book allocation of Rs 1,855 crore. The offer also included a Rs 795 crore tranche allocated for anchor investors. Jubilant Bevco, which launched a Rs 3,000 crore issue on Tuesday, attracted Rs 4,770.84 crore in bids. This included Rs 900 crore from anchor subscriptions and Rs 2,100 crore from the wider market.
HDFC Mutual Fund took nearly 37% of the two fully convertible, rupee-denominated, listed, rated and redeemable NCDs. Other key investors included Nippon India Mutual Fund, Franklin Templeton, Aditya Birla Sun Life Mutual Fund, Axis Mutual Fund, Kotak Mutual Fund, Nomura Fixed Income Securities, ICICI Prudential MF and Bajaj Finance. Jubilant Beverages’ issue was priced at 8.66% on an average, while the Jubilant Bevco issue was at 8.79%, the people said.

Morgan Stanley was the lead arranger of the issue. Standard Chartered was the co-arranger for the Jubilant Beverage paper.

Both bonds are structured as zero-coupon instruments with tenures of two years, 11 months and 27 days.Emails sent to the Jubilant Group and HDFC AMC remained unanswered as of press time Wednesday.

“We are seeing mutual funds, especially hybrid and corporate bond funds, emerge as anchor investors in short-term papers, particularly in the three-year segment,” said Venkatakrishnan Srinivasan, founder and managing partner at Rockfort Fincap LLP. “The spread over G-Secs remains attractive at around 80–85 basis points, which explains the strong appetite, compared to 10-year G-sec where the spread is approximately 40-45 basis points.” A surge in system liquidity since April has also boosted inflows into mutual funds, enabling them to deploy significant amounts in primary corporate bond issuances, where yields remain attractive, he said.

“Though this is a fixed-rate bond, some investors paid a higher amount for the minimum allocation which meant a lower effective yield for them,” said another person aware on condition of anonymity.

Proceeds from the bonds will go toward financing Jubilant Bhartia Group’s Rs 12,650 crore acquisition of Hindustan Coca-Cola Holdings (HCCB) alongside funds managed by Goldman Sachs Asset Management. The deal, first announced in December 2024, received clearance from the Competition Commission of India last month.

Under the transaction structure, Jubilant Beverages will acquire equity shares in HCCB from Coca-Cola entities. Meanwhile, Jubilant Bevco and the investor consortium will subscribe to compulsorily convertible preference shares issued by the company. Coke will reduce its shareholding further once the company lists, scheduled 1.0-1.5 years later.

The transaction marked the biggest acquisition by the promoters of the pizza-to-pharma conglomerate till date. The Bhartia family, which has exclusive franchise rights for Domino’s Pizza, India’s largest foods services brand, did not want to over-leverage. They are funding about Rs 5,000 crore themselves.

The total acquisition financing includes Rs 5,650 crore in debt and quasi-equity from private capital providers, with the remainder coming via equity infusion from the Jubilant Bhartia holding company. The transaction pegs the enterprise value of Hindustan Coca-Cola Beverages at Rs 31,250 crore.