India's Tilaknagar Industries is open to another large deal after its nearly $500 million purchase of the Imperial Blue whisky brand from Pernod Ricard, a top executive said, as consolidation gathers pace in India's liquor market.
Deals, including United Spirits' purchase of Nao Spirits and Sazerac's stake in John Distilleries, underscore growing investor interest in India's spirits industry as liquor makers seek to broaden portfolios and gain scale.
"Definitely we will" consider another deal on that scale if the right opportunity emerges, Chairman and Managing Director Amit Dahanukar said. "Before Imperial Blue, I would have never given a target number which had two times our revenue."
The maker of Mansion House brandy is open to any spirits category on acquisitions, Dahanukar said. "From an M&A perspective, we remain focused on the craft spirits space within the high-growth super premium and luxury segments," he added.
Dahanukar did not disclose how much the company had set aside for potential deals. He said Tilaknagar would be "disciplined" in financing future acquisitions, citing the mix of debt and equity used for the Imperial Blue purchase.
The Imperial Blue acquisition has already transformed Tilaknagar's scale.
Revenue nearly tripled to 10.26 billion Indian rupees ($107.46 million) in the first quarter ended June 30, with the whisky brand accounting for nearly two-thirds of total sales volume.
Industry fragmentation and state-level regulations make it difficult for liquor makers to build national scale, creating incentives for consolidation, said Devangshu Dutta, founder of retail consultancy Third Eyesight.
India is expected to become the world's largest spirits market by volume by 2032, surpassing China as millions of consumers reach legal drinking age each year, according to alcohol industry data provider IWSR.