By -
Nov 11, 2012
United Spirits Ltd. (UNSP) surged the most
in eight years in Mumbai trading after Diageo Plc (DGE) said it will
buy a controlling stake in the Indian distiller for $2.04
billion.
United Spirits climbed as much as 20 percent to 1632.55 rupees, headed for the biggest gain since November 2004, before trading at 1552 rupees at 9:18 a.m local time. The stock was the biggest gainer on the 10-member BSE India Fast Moving Consumer Goods Index. (BSETMCG)
London-based Diageo will acquire a 53.4 percent stake in United Spirits for 111.7 billion rupees ($2.04 billion), it said in a statement on Nov. 9. The deal with the Johnnie Walker Scotch maker will help United Spirits compete in India’s premium whiskey market, analysts at Religare Capital Markets said in a research note today.
The cash infusion will help the Indian company controlled by Vijay Mallya “improve its capital structure as well as margin profile in the medium to long term through premiumisation and operational efficiencies,” the Religare analysts said.
India’s whiskey market may grow to $31 billion in 2016 from $21 billion in 2011, according to Euromonitor International estimates.
United Spirits’s net income for the three months ended September declined 73 percent to 392.7 million rupees as raw material costs surged, the company said in a separate statement to the stock exchange on Nov. 9. Net sales increased 24 percent to 22.2 billion rupees in the quarter.
To contact the reporter on this story: Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net
United Spirits climbed as much as 20 percent to 1632.55 rupees, headed for the biggest gain since November 2004, before trading at 1552 rupees at 9:18 a.m local time. The stock was the biggest gainer on the 10-member BSE India Fast Moving Consumer Goods Index. (BSETMCG)
London-based Diageo will acquire a 53.4 percent stake in United Spirits for 111.7 billion rupees ($2.04 billion), it said in a statement on Nov. 9. The deal with the Johnnie Walker Scotch maker will help United Spirits compete in India’s premium whiskey market, analysts at Religare Capital Markets said in a research note today.
The cash infusion will help the Indian company controlled by Vijay Mallya “improve its capital structure as well as margin profile in the medium to long term through premiumisation and operational efficiencies,” the Religare analysts said.
India’s whiskey market may grow to $31 billion in 2016 from $21 billion in 2011, according to Euromonitor International estimates.
United Spirits’s net income for the three months ended September declined 73 percent to 392.7 million rupees as raw material costs surged, the company said in a separate statement to the stock exchange on Nov. 9. Net sales increased 24 percent to 22.2 billion rupees in the quarter.
To contact the reporter on this story: Malavika Sharma in New Delhi at msharma52@bloomberg.net
To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net
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