After the FDI policy was revised, Gao Yuan Capital’s investment was disclosed.
Editor’s note: This article is from the micro-channel public number “Chi as the network” (ID: passagegroup) , Author: Chen Yanni.
On April 22, the Indian media disclosed that Gaoyuan Capital has acquired more than 1% of the shares of United Breweries Ltd (hereinafter referred to as “United Brewing”), which owns Kingfisher, the Indian best-selling beer brand.
In the first quarter of 2020, Gao Heng Capital ’s hedge funds acquired more than 1% of United Brewery ’s shares for approximately US $ 40 million (approximately Rs 30.7 crore) through open market transactions. United Brewing is controlled by Dutch beer giant Heineken, whose share price has plunged by a third since the beginning of March. Heineken is the largest single shareholder of United Brewing, with a shareholding ratio of approximately 46.5%.
The transaction was disclosed after the Indian government revised its foreign direct investment policy (FDI). On April 18th, the Indian government stipulated that all investment from neighboring countries must follow the government approval path. Although the country was not clearly indicated in the notice, the move was generally interpreted as specifically targeting Chinese capital.
Prior to this, Gao Leng Capital has invested in several Indian startups, such as Indian car home CarDekho, takeaway giant Swiggy and new bank startup EpiFi. Its global portfolio includes technology giants such as Tencent, Baidu and Airbnb.
According to data from Gateway House, a foreign policy think tank, Chinese investors are betting up to US $ 4 billion in nearly 90 technology startups in India, including payment giant Paytm, fresh e-commerce BigBasket, takeaway giant Zomato and online education platform Byju’s. Gao Yuan Capital is one of the Chinese investors active in India.
United Brewing was founded in 1915 and is headquartered in Bangalore. It is engaged in beer production and trading, and provides brand licenses. The brands it sells include: Kingfisher, Zingaro, UB Export, London Pilsner Premium Strong, Kalyani Black Label Strong and Bullet. Currently listed on the National Stock Exchange of India (NSE).
His former CEO was beer and aviation tycoon Vijay Mallya. In 2013, Kingfisher Airlines, which he founded, declared bankruptcy due to poor finances, owed $ 1.4 billion in debt and faced fraud charges. In March 2016, Vizai fled to the UK to avoid debt. The Indian government demanded that the United Kingdom extradite Vizai to return home. On April 20 this year, the British High Court ruled that Vizay sought to overturn the extradition ruling and lost the appeal.
Since this year, United Brewery’s stock price has plummeted by as much as 44%, and then rebounded slightly. The stock closed at Rs 925.00 per share on Tuesday (April 21), down nearly a third from its 2020 high.
In the wine industry, there have been several large financings worth paying attention to in recent years. In October 2019, Mumbai beer technology company White Owl Brewery Pvt. Ltd raised Rs 400 crore in a new round of financing led by IIFL Asset Management Ltd.
In May 2019, B9 Beverages, which produces craft beer brand Bira 91, raised US $ 10 million in bond financing. The lead investor was Sixth Sense Ventures, a venture capital company focused on consumer business. Sequoia Capital and Belgian investment company Sofina were both investors.
In the same month, the British brewing company headquartered in Mumbai, India received an initial promise of 1 billion rupees (about 14.2 million US dollars) in its first external equity financing. Investors include NeoMile Capital.
In January 2019, United Wine Co., Ltd. sold its Four Seasons Wine Co., Ltd., a wine subsidiary in Bangalore, to Grover Zampa Vineyards Co., Ltd. and its investor Quinte Pull Asset Co., Ltd.