>GLOBUS SPIRITS LIMITED - IPO NOTE (HDFC SECURITIES)

Background & Operations:
Globus Spirits Ltd (GSL) is amongst the leading players in the Alcohol industry in North India. Since its inception in 1992, GSL has been in the business of manufacturing, sales and marketing of Indian Made Foreign Liquor (IMFL), Industrial Alcohol and Country Liquor.

GSL is engaged in the business of manufacture, marketing and sale of Industrial Alcohol comprising Rectified Spirit and Extra-Neutral Alcohol, Country Liquor, and Indian Made Foreign Liquor (IMFL). GSL has established its identity in Country Liquor and IMFL business with steady growth and production of high quality liquor. GSL has a brand portfolio of its own in the Country Liquor segment, and caters to reputed Indian brands in the IMFL segment. GSL has already launched its own IMFL brands in the north Indian state of Haryana and proposes to launch the brands in six more states in North India and four states in South India.

GSL has two modern distilleries at the following locations:

• Behror, District Alwar, Rajasthan: The facility is built on an area admeasuring 17.97 acres of land. The unit has its own captive supply of water and power.
• Samalkha, District Panipat, Haryana: The facility is built on an area admeasuring 16.575 acres of land. The unit has its own captive supply of water and power.

At present both the units are capable of manufacturing alcohol from both molasses and grain. Both the Units have licensed and installed capacity of 144 lakh Bulk Litres (BL) p.a. each aggregating to 288 lakh BL.

The plants are currently engaged in the manufacturing of Industrial Alcohol (comprising Rectified Spirit, and Extra Neutral Alcohol (ENA); Country Liquor (CL); and Indian Made Foreign Liquor (IMFL). Both the distilleries have modern bottling facilities equipped with bottling machines, which caters to its own production of Country Liquor and IMFL brands. Also, the Company has tie-ups for bottling IMFL products for other brand owners.

GSL’s major brands are as under:

> Country Liquor

• Rana
• Rajasthan No.-1
• Ghoomar
• Samalkha No.-1
• Samalkha Ki Saunfi
• Kinnu
• Commander

> IMFL

• White Lace Gin White Lace Dry Gin
• White Lace Duet Gin GR 8 Times Dry Gin Samurai Gold Extra Rich Blend Whisky
• Samurai Premium Whisky 20-20 Premium Whisky
• 20-20 Superior Whisky *
• GR 8 Times Whisky
• GR 8 Times XXX Rum
• Hannibal Legendry Rum
• Hannibal Legendry XXX Rum *
• Samurai XXX Rum
• Samurai Grape Brandy
• Samurai Superior Grape Brandy *
• Samurai Superior Whisky *
• Academy Deluxe XXX Rum
• Academy Deluxe Brandy

(* = blended and bottled by Tracstar Invesments Pvt Ltd., the licensee in Karnataka)

GSL has already entered the IMFL segment by launching its own brands in Haryana, Rajasthan, Chandigarh, Uttar Pradesh, Kerala, Andhra Pradesh and Karnataka. The Company also proposes to launch the brands in two more states/Union territory in North India and one state/Union Territory in South India. The Company envisages that its presence in more and more states of the Country will give it a better competitive position in the IMFL segment.

Objects of Issue:
The Objects of the Issue are as stated below:
■ Installation of a Multi-Pressure Distillation Plant to produce quality Extra Neutral Alcohol (ENA) of 35,000 Litres per day from both Molasses and Grain at Behror Unit in Rajasthan

■ Installation of a Multi-Pressure Distillation Plant to produce quality Extra Neutral Alcohol (ENA) of 35,000 Litres per day from Grain at Samalkha Unit in Haryana

■ Capacity expansion of Total Spirit-based Starch Liquefaction section from 60 KLPD to 75 KLPD, with modernization at Behror Unit, Rajasthan

■ Installation of a High-Pressure Boiler and Back–Pressure Turbine, which would use Biogas and Biomass as fuel; and implementation of Green House Gas Abatement project at both units

■ Brand development for marketing IMFL brands in 10 more States/Union Territories

■ Acquisition of Canteen Stores Department (CSD) registered IMFL Brands

■ Revamping of existing storage/bottling capacity at Samalkha Unit
HDF
■ To meet the expenses of the issue

■ To list the equity shares on the Bombay Stock Exchange Limited (BSE), the Designated Stock Exchange; and National Stock Exchange of India Limited (NSE), which will enhance GSL’s brand name and provide liquidity to its shareholders

To see full report: GLOBUS SPIRITS