Varun Beverages Invests ₹4,128.04 Million in Its Subsidiary in South Africa

Varun Beverages (NSE: VBL) announced an investment of ₹4,128.04 million in The Beverage Company (Bevco), South Africa, subscribing to approximately 1.98 lakh shares to support debt repayment and growth, the company said in a press release on the stock exchanges.

Investment Details and Strategic Purpose

This move aims to support Bevco in repaying existing debt and strengthening its balance sheet for future growth.

Bevco is involved in the manufacturing and distribution of licensed (PepsiCo Inc.) and its own-branded non-alcoholic beverages in South Africa, Lesotho, and Eswatini. For FY 2023-24, Bevco reported a consolidated turnover of ZAR 4,090 Million.

The acquisition is considered an arm’s length transaction, as Bevco is a subsidiary of VBL. There are no additional interests from the promoter/promoter group or other group companies in this transaction.

The subscription will result in a 2.42% increase in the share capital of Bevco. The investment will help to strengthen Bevco’s operations and support its future business expansion.

Q2 FY25 Financial Highlights

Varun Beverages reported a significant 22.33% increase in consolidated net profit for the September quarter of FY25, reaching ₹628.82 crore, up from ₹514.05 crore in the same period last year.

This growth was driven by strong volume increases and improved profit margins. The company’s revenue from operations rose by 25.25% to ₹4,932.06 crore, compared to ₹3,937.75 crore in the previous year.

Share Price Performance

Varun Beverages’s share price traded 0.57% lower at ₹645 at 9:45 AM on the NSE. The stock opened at ₹654 higher than ₹648.70 at its previous close.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.