PE fund AION fully exits Varun Beverages, walks away with 2x returns

Company News

Nearly three-and-a-half years after it invested $90 million in Ravi Jaipuria-promoted Varun Beverages, the bottlers for beverage giant Pepsi, private equity fund AION has decided to completely exit the company.

In a block deal, AION has sold its 4.5 per cent stake in the company at Rs 850 a share, a slight premium over the stock’s closing price of Rs 844.75 on the National Stock Exchange (NSE) on Tuesday. According to sources, this translates into a 25 per cent return on equity per year in dollar terms, or 2x returns over the holding period. The fund generated 2x on equity invested in the company. When contacted, Parth Gandhi, senior partner and managing director of AION, declined to comment on the transaction.

AION, a joint venture between Apollo Global Management and ICICI Venture, had invested $90 million in Varun Beverages — half of that in debt and half in convertible debentures.
In 2016, Varun Beverages came up with a Rs 1,100-crore initial public offering (IPO), which was subscribed 1.8 times at Rs 445 a share. After the company was listed, AION sold its stake in various tranches.

AION has so far invested in a number of Indian companies, the latest being Monett Ispat, the steel company it acquired as part of a consortium with JSW through the insolvency route, paying Rs 2457 crore for the deal. This year, it also acquired information technology (IT) and back-office operations of InterGlobe Technologies, the Rahul Bhatia company that runs IndiGo Airlines, for $230 million. In 2016, it also bought — along with partners like former Genpact chief executive Pramod Bhasin and GE commercial finance business head Anil Chawla — the commercial lending and leasing business of GE Capital for $360 million.


 Varun Beverages, the flagship company of the Ravi Jaipuria group, in February this year cemented its long-term relationship with PepsiCo.