“This is a well-timed move, and we are expecting Carlsberg to price this issue aggressively,” said Kranthi Bathini, director of Mumbai-based financial advisory firm WealthMills Securities Pvt. “Rising disposable incomes and changing attitudes toward alcohol among young urban consumers make this a good India consumption story that investors will lap up.”
Carlsberg may be attracted by the high valuations in the Indian stock market, where United Breweries trades at about 73 times this year’s estimated earnings, according to data compiled by Bloomberg. Shares of the Bengaluru-based company have risen 61 per cent over the past 12 months, outpacing the 15 per cent gain in the benchmark S&P BSE Sensex. Diageo Plc’s local unit, whiskey producer United Spirits Ltd., trades at 63 times forecast profit.
Any deal will add to the $3.9 billion raised through IPOs in India this year, up from $2.2 billion during the same period in 2017, Bloomberg-compiled data show. Exact details of Carlsberg’s potential India offering haven’t been set yet, and there’s no certainty the deliberations will lead to a transaction, the people said.
A representative for Carlsberg declined to comment.
Carlsberg started operations in 2007 in India, where it sells five types of beer under the Carlsberg and Tuborg brands, according to its website. It finalized the building of its eighth brewery in the country, located in the southwestern state of Karnataka, at the end of last year, according to its annual report.
The company’s India sales volume rose more than 30 per cent in the quarter ended March from a year earlier, rebounding from a dip caused by the government’s ban on alcohol sales along highways, Chief Financial Officer Heine Dalsgaard said on an analyst call last month. Carlsberg’s Tuborg lagers accounted for 81 per cent of its net revenue in India last year, according to its 2017 annual report.