Varun Beverages Announces Rs 412 Crore Investment in South African Subsidiary Bevco

Varun Beverages Ltd (VBL), a major bottler for PepsiCo, has revealed plans to invest Rs 412 crore in its South African subsidiary, Beverage Company Proprietary (Bevco). Bevco is involved in producing and distributing PepsiCo's licensed products and its own non-alcoholic beverages in South Africa. It also holds franchise rights from PepsiCo in South Africa, Lesotho, and Eswatini.

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Investment Details and Share Allocation

VBL has invested Rs 412.80 crore by purchasing ordinary shares of Bevco, as stated in a regulatory filing. Bevco has issued 19.84 lakh ordinary shares to VBL. This new investment will increase the share capital by 2.42 per cent, according to the company's disclosure.

Financial Impact and Strategic Growth

The fresh capital will enable Bevco to repay existing debts and strengthen its balance sheet, facilitating business growth. VBL, promoted by the Jaipuria family, contributes to 90 per cent of PepsiCo's beverage sales volume in India. The investment aligns with VBL's strategy to enhance its presence in the African market.

In December 2023, VBL announced acquiring Bevco and its wholly-owned subsidiaries for an enterprise value of Rs 1,320 crore. This acquisition aims to expand VBL's geographical reach within Africa. On Thursday, Varun Beverages Ltd's shares closed at Rs 648.40 on BSE, marking a decrease of 0.33 per cent from the previous day.

This strategic move by VBL underscores its commitment to strengthening its operations and expanding its market presence in Africa through significant investments and acquisitions.