Tilaknagar Industries in talks to raise Rs 2,000 cr for Imperial Blue deal

Tilaknagar Industries, the maker of Mansion House brandy, is in talks with Standard Chartered, JP Morgan, and Nomura to raise about Rs 2,000 crore in debt to help finance its Rs 4,150-crore purchase of the Imperial Blue whisky brand from Pernod Ricard SA, people familiar with the matter told ET.

The local-currency debt is expected to be priced in the 11-12% range, the people said. The discussions follow Tilaknagar's Rs 2,296 crore equity and warrant sale earlier this year, priced at Rs 382 per share, with participation from promoters and existing shareholders. Chairman and MD Amit Dahanukar subscribed to warrants worth around Rs 306 crore. Proceeds from the share sale will partly fund the acquisition, with the remainder covered by the planned debt raise. Avendus Capital is arranging the financing.

While Tilaknagar initially explored costlier loans from credit funds, the equity raise has allowed it to seek cheaper funding from foreign banks, sources said.

Spokespersons for Standard Chartered and JPMorgan declined to comment, while Nomura didn't immediately respond to requests for comment.

"In terms of financing the acquisition, we are looking at an optimal mix of equity and debt," Tilaknagar's management told investors during its first-quarter earnings call. "We expect to reduce debt over time, targeting net debt-to-EBITDA below one by FY29."

The Imperial Blue acquisition, structured as a slump sale, values the business at Rs 4,150 crore, including normalized working capital of Rs 700 crore and deferred consideration of Rs 282 crore payable in FY30. The deal covers Imperial Blue and related brands and assets from Pernod Ricard India.

Tilaknagar's turnaround has been marked by a 2020 debt restructuring with Edelweiss Asset Reconstruction Co., followed by steady deleveraging. The Mumbai-based distiller became net debt-free in September 2024, aided by a 10-year manufacturing agreement with Pernod Ricard in Maharashtra and multiple capital raises since 2021 of over '310 crore.

The company repaid Edelweiss ARC using cash reserves and a term loan from Kotak Mahindra Bank.