Bira taking to foreign investors for up to 20% stake sale

India’s B9 Beverages, maker of popular craft beer Bira, is in talks with international brewers and investors to…
Bira taking to foreign investors for up to 20% stake sale

“We’ve been looking for a combination: (an) international beer company as a strategic investor and a separate financial partner,” CEO Ankur Jain said in a phone interview, adding that the company was at the “intermediate stage” of raising funds. “We’ve been talking to beer companies that are not competitive in India, or have minimal operations here.”

Data provider PitchBook estimates New Delhi-based Bira was valued at $210 million in 2018. US-based Sequoia Capital holds a roughly 45% stake in the company, while Jain and his family own around 30%.

Jain declined to name the companies with which it is in talks, but four industry people in the know said Bira was in talks with Kirin Holdings, one of Japan’s biggest beer makers which has limited sales in India.

A Kirin spokesman said there was “absolutely no discussion at the moment” on taking a stake in Bira. Last week Kirin cut its full-year profit outlook due to the covid-19 impact and said it would avoid “non-essential” investments.

A Kirin official said the company sees India as a growth market and that it has looked at Bira, but that it was part of a broader study into global markets. One of the Indian industry officials said that Bira and Kirin had discussed a deal which would also allow the Japanese brewer to offer its brands directly— which include Kirin Lager and Ichiban Shibori—in India’s estimated $7 billion beer market.

Kirin has, in the past, shown interest in independent breweries and owns a minority stake in New York’s Brooklyn Brewery.

Bira, launched in 2015, is one of the smallest players in India, but its craft beer offerings have become increasingly popular. Jain said Bira had a 5-10% share of the beer market in New Delhi, Mumbai and Bengaluru.

India’s beer market is dominated by firms like United Breweries, Anheuser-Busch InBev and Carlsberg, as per IWSR Drinks Market Analysis.

An investment from Kirin or any other investor would help Bira, which has been incurring losses and has, more recently, taken a beating due to the pandemic, just like the rest of the industry. Bira has also talked of plans to list on the exchanges.

“Bira is really struggling financially at the moment and they badly need a lifeline,” said an Indian industry official. The firm clocked $24.5 million in sales in FY20, but its loss for the period doubled to $27 million.

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