CORPORATE PRESENTATION Meet/200047_20100730.pdf · 9Authorised Share Capital increased from Rs. 10...

CORPORATE PRESENTATION

Copyright © Globus Spirits Ltd 2009

Disclaimer

Thi P t ti h b d t id l i f ti b t th C t

Disclaimer

This Presentation has been prepared to provide general information about the Company topotential investors to whom it is addressed and who are eligible to subscribe to the equityshares of the Company. This Presentation does not purport to contain all requiredinformation for potential investors and consists of information already in the public domainor that is not price sensitive. Neither this presentation nor any other information supplied in

ti ith th it h i i t d d t b i f dit thconnection with the equity shares is intended to serve as basis of any credit or otherevaluation. The recipients of this presentation should not consider it as a recommendation topurchase the equity shares. Each investor contemplating to subscribe to any equity shares ofthis Company should refer to the Red Herring Prospectus and make an independentinvestigation of the financial condition and affairs of the Company. Potential investorsh ld lt th i fi i l l l t d th f i l d i t th i kshould consult their own financial, legal, tax and other professional advisors as to the risks

and investment considerations arising from an investment in the equity shares of theCompany. This Presentation is not intended to and does not constitute an invitation to offer


for subscription to the equity shares of the Company.

AgendaAgenda

Industry Overview

Company Overview

Promoters and Management

G th O t itiGrowth Opportunities

Financials

Project and Issue Details

Copyright © Globus Spirits Ltd 2009 3

INDUSTRY OVERVIEW


The Indian Alcohol IndustryThe Indian Alcohol Industry

Indian Alcohol Industry

Potable Industrial

Country Liquor IMFL Bulk Spirits Beer Esters Acetic Acid Fuel Mixing

Gl b S i it ’ O ti AGlobus Spirits’ Operating Areas


The industry is broken up into three major segments

Industry Breakup in millions of cases IMFL Breakup in millions of casesIndustry Breakup, in millions of cases

Others , 3,

IMFL Breakup, in millions of cases

Beer , 137, 26%

Rum 38

Vodka , 4.5, 3%

Gin , 3.4, 2%

2%

IMFL , 160, 31%

Country Liquor , 225, 43%

Whisky, 86, 53%

Brandy , 28,

Rum , 38, 23%

17%


The growth of the Indian Alcobev industryThe growth of the Indian Alcobev industry• Research has suggested that around 50% of all consumption of

liquor in India is not recorded. Segment Volume(

Growth q• The largest segment, CL, is perhaps the most affected by unrecorded

consumption. This share of unrecorded consumption is expected todecrease as the state as well as the central governments have crackeddown on illicit liquor

(mncases)

rate

Beer 137 12%down on illicit liquor.

• Already the largest market for whisky, all Indian IMFL segments areexpected to grow as well.

• Some drivers for growth in total consumption are:

Country Liquor

225 7%

IMFL 160 12%Some drivers for growth in total consumption are:Population growthAverage age of initiation into drinking coming downFavorable change in societal perception

%

Whisky 86 10%

Brandy 28 6%Favorable change in societal perceptionIncrease in purchasing power and a constantly upgradingconsumer baseAmong the lowest per capita consumption – 2.0 litres per year

Rum 38 8%

Vodka 4.5 25%

3.8 litres Thailand; 5.0 litres U.S.; 9.0 litres in RussiaFavorable Regulatory RegimeOpening up of trade channels

Gin 3.4 10%

Others 3 NA

Total 525 8%


1. Source: Credit Suisse, Company Sources, for 20072. WHO

p g p Total 525 8%

7

COMPANY OVERVIEW


A Brief HistoryLaunched its own IMFL brands across India which has met with huge success (20-20 Hannibal Samurai Gold While Lace etc )

2007-08

A Brief History…

Crossed Rs 1000mn sales Authorised Share Capital increased from Rs. 10 crores to Rs. 25 croresName of the Company changed from Globus Agronics Limited to Globus Spirits Limited

(20-20, Hannibal, Samurai Gold, While Lace etc.)Crossed Rs 1500mn sales

2006-07

o Fa

r

Sets up Effluent Treatment and Environment friendly Bio-Composite Plant

Grain based Distillation Plant commences operation at Samalkha Unit in April, 2005

p y g g p

2004-05

2005-06

y So

During the year Behror Unit also started production

Started production of IMFL at its Behror unit

Commenced bottling of IMFL at Behror Unit in August, 1999 and Country Liquor at Samalkha Unit

1996-97

1998-99

1999-00

urne Sets up second Distillery unit at Behror, Rajasthan ; Unit commissioned

Enters into agreement with International Distilleries (India) Ltd.(1) to bottle IMFL products under the brand name of ‘IDI’

g y pCrossed Rs 500mn sales

1995-96

1996 97

Jou

Set up first Distillery; commenced production of Ethyl Alcohol in April 1994 at Samalkha Unit, Haryana. Unit was set up with an installed capacity of 144 lakh BL per annum

Acquired 18 acres of land in village Shyampur in Behror, Rajasthan

t e b a d a e o

1994-95


1. A subsidiary of International Distillers and Ventures, UK.

9

World-class, fully-integrated, multi-f d t k l tfeedstock plants

The company currently operates two modern distilleries atRajasthan and HaryanaThe licensed and installed capacity at each plant is 14.4 millionbulk litres (BL) per annum and presently the utilization is 100% atbu t es ( ) pe a u a d p ese t y t e ut at o s 00% atboth units.Superior quality at low costs

We are amongst few Indian manufacturers that havecompletely streamlined multi-feedstock (coarse grain andmolases) abilities thereby reducing costsExperienced manpower and rigorous quality protocols ensureconsistent high quality produceconsistent high quality produce

Both plants are fully integrated and can produceRectified SpiritExtra Neutral Alcohol (ENA)Extra Neutral Alcohol (ENA)Country Liquor (CL)Indian Made Foreign Liquor (IMFL)


GSL straddles four business linesGSL straddles four business linesWe are amongst the only players in the country that straddles all four business lines of the spirits industry, thereby allowing our investors to have a true stake in the progress of the p y, y g p gindustry as a whole

Country Liquor• Market Leader in North India

Bulk Alcohol• Sale of bulk alcohol as a• Market Leader in North India

• Rajasthan | 2.5mn | 25%• Haryana | 2.0mn | 15%• New Delhi | 1.3mn | 20%• Chandigarh | 0 2mn | 15%

• Sale of bulk alcohol as a commodity

• Clients are elite Indian Alcobev Companies such as United Spirits Seagrams etc• Chandigarh | 0.2mn | 15%

(sales in cases pa| market share)

IMFL F hi IMFL O B d

United Spirits, Seagrams etc.

IMFL – Franchise• Existing tie‐up with ABD India

for the state of Rajasthan –1.0 mn cases per annum

IMFL – Own Brands• Recent foray in to this

segment in 2007‐’08• So far over 13 brands and p

• Recent association with Jagatjit Industries, for the state of Haryana – 1.2mn cases per annum

their variants launched• Company’s brands present in

7 states so far – HRY, RJ, CHD, UP, KL, KA, AP


p , , ,

11

Value Chain of Each Business LineValue Chain of Each Business LineOf Bulk Alcohol ‐ $

Raw Material

MolassesGrain

Conversion into

alcoholDistiller Bottler

Of Franchise IMFL ‐ $$

Raw Material

MolassesGrain

Conversion into

alcoholDistiller

Packaging750, 375, 180ml

Bottler Distributor

Of Final Packaged Products (country liquor/imfl) ‐ $$$

Raw Material

MolassesGrain

Conversion into

alcoholDistiller

Packaging750, 375, 180ml

Bottler •Govt•Private

Distributor

•Govt•Private

Retailer Consumer


MANAGEMENT


Board of DirectorsBoard of DirectorsMr. Gautam Premnath Khandelwal – Non-Executive ChairmanMr. Khandelwal has over 23 years of experience in senior managerial positions and he is on the Board of many companiessuch as Nagpur Power & Industries Ltd., Motwane Mfg. Co. Pvt. Ltd., Krohm Solutions Pvt. Ltd., Punjab National Bank etc.such as Nagpur Power & Industries Ltd., Motwane Mfg. Co. Pvt. Ltd., Krohm Solutions Pvt. Ltd., Punjab National Bank etc.

Mr. Ajay Kumar Swarup – Promoter & Managing Director – 50 yearsProduct of The prestigious Doon School, Dehrandun; BA Economics (Hons.), St. Stephens College, Delhi University,PGDBM from IIM Kolkatta. He has over 24 years of experience in the alcohol industry. Co-promoted Associated Distilleriesin 1983 nd pr m t d GSL in 1993 H l th Pr id nt f All Indi Di till r ’ A i ti n during th r 1992 ‘95in 1983 and promoted GSL in 1993. He was also the President of All India Distillers’ Association during the years 1992 – ‘95

Mr. Manik Lal Dutta – Executive Director – 63 years36+ years in alcohol industry. He was earlier with UB Group as production head for North India & Nepal operation

M D k R Di 57Mr. Deepak Roy – Director – 57 yearsExtensive experience in marketing and general managementwith companies such as Glaxo, Ranbaxy, Warner Hindustan,UB Group, Diageo. Undertook management buyout of UDV’s domestic portfolio of brands .Currently Vice Chairman ofAllied Blenders and Distillers Pvt Ltd

Mr. Joginder Singh Damija – Independent Director – 75 years46+ years experience in various industries including liquor. Served with major spirit companies including UB Group inmultiple positions and as Director and Vice chairman of SAB India.

Mr. Santosh Kumar Bishwal – Independent Director – 62 yearsMr. Santosh Kumar Bishwal Independent Director 62 yearsExtensive experience with forms such Union Carbide, UB. Group in senior positions. Faculty at XLRI

Mr. Rajesh Kumar Malik – Whole-time director – 53 years29+ years experience in liquor industries with firms such as Tilaknagar industries, Associated Distilleries, etc.


Mr. Rameshwar Dayal Aggarwal – Whole-time director – 54 years25+ years experience in alcohol industry with firms such as Royal Distilleries, Som Distilleries, Oasis Distilleries, etc.

14

Key Managerial PersonnelKey Managerial PersonnelName of Employee

Designation Age (Yrs)

Qualification Experience (Yrs)

Previous Employment /DesignationEmployee (Yrs) (Yrs) /Designation

Dr. Bhaskar Roy Executive VP & Chief Financial Officer

45 M.Com, FCA, PhD 20

Saraya Distillery (Unit of Saraya Industries Ltd.)Chief General Manager (Finance)(Finance)

Mr. Anil Arora Asst. Vice President‐Sales (North & East)

49BA, Post Graduate in Marketing & Sales Management

25

AB Grain and Spirits Pvt. Limited Vice President‐Marketing & Sales‐All

B S Di l i M i l

Mr. Jeevan Das Manager (Materials) 44

B.Sc, Diploma in Materials Management From NIIRD, Chennai,Diploma in Mech. Engg from AIES, Kolkata

20Bharat Explosives Limited,Dy. Manage (Material)

Mr. Deepak Saroha

Works Manager (Behror, Rajasthan)

35B.Sc,D.I.F.A.T, from VSI, Pune

10Radico Khaitan Ltd., Senior, Chemist

Mr. Kapil General Manager ‐k 39 B A PGDIR & PM 11

pVerma

works(Samalkha, Haryana)

39 B.A., PGDIR & PM 11 ‐

Mr. Santosh Kumar Company Secretary 32

B.Com, LLB, ACS, Diploma in Computer Software from 4

Magnum Strips & Tubes Pvt. Ltd.


Pattanayak APTECH Company Secretary

15

GROWTH OPPORTUNITIES


Pillars of growthPillars of growth

Emerge as a force to reckon in the

Branded IMFL space

Strengthen IMFL -Franchise Brands

Maintain leadership in Country Liquor

Continue dominance in the

Bulk Alcohol space via quality and cost


Enablers and drivers of growthEnablers and drivers of growth

IMFL Market Development•Increase distribution

Capacity Expansion•Capacity to

CL Leadership Consolidation•Continued focus on

Operational Improvement•Implementing ERP to

in existing markets•Addition of Eastern and Western Regions

•Aggressive and

manufacture bulk alcohol at both units to be doubled

•Increase bottling

quality and costs to remain competitive in the CL market

•Extending depth of

achieve lower cost and reaction times

•Reduction in energy consumptionAggressive and

innovative marketing across media

•Strong sales and marketing teams

gcapacity to cater to increasing demand of the bottled products segments

g pdistribution coverage further

•Product innovations leading to launch of

p•Launching Green House Gas abatement initiative

•Increasingmarketing teams•Acquisition of a CSD registered brand

gmore brands, variants and flavours

Increasing cogeneration capacity


FINANCIALS


Financial ReviewPrevious 4 Years

Revenues, in Rs. Mill

Financial ReviewPrevious 4 years

EBIDTA, in Rs.Million, ,

Previous 4 Years Profit Previous 4 Years Profit Before Tax, in Rs. Million After Tax, in Rs.Million


Financial ReviewFinancial ReviewGross Sales by Segments, in Rs. Million Profitability Margins

18352

104

868 1,167 2,353 2,814

14%

16%

14%15.20%

Profitability Margins

333

4683352

10.70%10%

14%

9681034

3176%

8% 8%7%

571850 967 1025

74224

FY 2006 FY 2007 FY 2008 FY 2009

Country Liquor IMFL Franchise Brands Industrial Alcohol IMFL In‐House BrandsSales Other

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010*

PAT Margins EBITDA Margin

* FY 2010 Margins are based on Audited Q1 2010 results


Sales Other

21

FY 2010 Margins are based on Audited Q1 2010 results.

Peer Group AnalysisPeer Group AnalysisSource: Prowess, CMIE


Peer Group AnalysisPeer Group Analysis

EPS PE

21.32 Globus Spirits

EPS

1 4.69

PE

‐0.9

‐0.4

Jagatjit Industries

Khoday’s

2.6

4.4

Associated Alcohol

Radico Khaitan

7.7

20.14.4

7.1 Empee Distilleries

U i d S i i

20.4

30 229.7

36.6

United Spirits

Tilaknagar Industries

30.2

5


1 EPS annualized based on Q1 2010, PE based on higher band of IPO

23

FY 2009 vs Q1 2010FY 2009 vs Q1 2010Particulars FY 2009 (Rs. Crores) Q1 2010 (Rs. Crores)

Net Sales 199.80 63.11

EBITDA 28.57 (14.3%) 9.46 (15.2%)

( ) ( )PAT 12.90(6.5%) 6.78 (10.7%)

EPS Rs. 10.5 Rs. 21.30*

PE (based on upper 9 50 4 69PE (based on upper price band)

9.50 4.69

* Annualized


PROJECT DETAILS


Project Details as appraised by SBIProject Details as appraised by SBIParticulars Amount % of total

(in Rs Lakhs)(in Rs Lakhs) Upgradation of Production Facilities 5,777 65%

Multi‐Pressure Distillation Plant to produce 35,000 litres/day of ENA at BehrorUnit

676

l ll l d l /d fMulti‐Pressure Distillation Plant, to produce 35,000 litres/day of ENA , at Samalkha Unit

2,665

Total Spirit based Starch Liquefaction section expansion by 15 KLPD capacity at Behror

333

Fermentation Modification Work in existing Grain based Distillery at BehrorUnit

66

Powerpac Travelling Grate Furnace Boilers at Behror & Samalkha 9182000 KW / 415V Bleed‐cum‐Back Pressure Turbine at Behror & Samalkha 450Green House Gases (GHG) Abatement Project at Behror & Samalkha 15IMFL Bottling Section at Samalkha Unit. 262IMFL Bottling Section at Behror Unit 352Mi ll Ci il St t 40Miscellaneous Civil Structures 40

IMFL ‐ Own Brands Development 3,151 35%Brand Development for Marketing of IMFL Brands 2,851Acquisition of Canteen Stores Department registered IMFL Brands 300


q f p gTotal 8,928 100%

26

Issue DetailIssue Size 75 Lakh equity shares of the face value of Rs. 10

Issue Detail

QIBs Portion Up to 37.25 Lakh equity shares

NIBs Portion At least 11.175 Lakh equity shares

RIBs Portion At least 26.075 Lakh equity shares

Price Band Rs.90 – Rs.100 per equity share

Paid up capital Pre‐Issue – Rs 1225.77 Lakhs Post‐Issue – Rs.1975.77 Lakhs

Market Capitalization At lower band – Rs 177 Crores At upper band ‐ Rs. 197 Crores

Promoter holding Pre‐Issue – 92.74% Post‐Issue – 59.81%

Grading “CARE IPO Grade 3” from CARE

I P Issue Opens on 31/08/09 Issue Closes on 02 09 09Issue Program Issue Opens on –31/08/09 Issue Closes on – 02.09.09

Listing BSE & NSE

BRLM K t C t S i Li it d & SREI C it l M k t Li it d


BRLMs Keynote Corporate Services Limited & SREI Capital Markets Limited

27

THANK YOU


CORPORATE PRESENTATION Meet/200047_20100730.pdf · 9Authorised Share Capital increased from Rs. 10...

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