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Jubilant Bhartia eyes ₹5,650 cr NCDs to fund 40% stake in Coca-Cola deal
The Jubilant Bhartia Group is gearing up to raise over ₹5,650 crore through non-convertible debentures (NCDs) issued by two group companies, to help finance its ₹12,650 crore acquisition of a 40 per cent stake in Hindustan Coca-Cola Holdings Pvt Ltd (HCCH), Coca-Cola's largest bottling partner in India, according to a report by The Economic Times.
Jubilant Beverages Ltd, a subsidiary of Jubilant Bhartia Group, plans to issue ₹2,650 crore in fully paid-up, unsecured, rupee-denominated, listed-rated, redeemable NCDs, the news report said. The offering will be split into ₹795 crore from anchor investors and ₹1,855 crore from a broader market tranche.
Separately, Jubilant Bevco Ltd aims to raise ₹3,000 crore through a similar bond issuance, including ₹900 crore from anchor subscriptions and ₹2,100 crore from other investors.
Zero-coupon structure and step-up clause
Both NCD issuances are structured as zero-coupon instruments with tenures of two years, 11 months, and 27 days. They offer annualised implied yields of 9 per cent for Jubilant Beverages and 9.15 per cent for Jubilant Bevco. The bonds include a step-up clause: in the event of a credit rating downgrade, the internal rate of return will increase by 25 basis points. Instead of periodic coupon payments, investors will receive a redemption premium at maturity.
Public issue opens on June 4
For Jubilant Beverages Ltd, six anchor investors — including HDFC Mutual Fund, Nippon India Mutual Fund, Franklin Templeton Mutual Fund, Aditya Birla Sun Life Mutual Fund, Axis Mutual Fund, and Nomura Fixed Income Securities Ltd — have committed ₹795 crore, The Economic Times report said.
Financing the HCCH acquisition
Proceeds from the NCDs will contribute to financing the group's acquisition of HCCH, which was announced in December 2024 and received Competition Commission of India approval on May 1 this year. Under the deal structure, Jubilant Beverages Ltd will acquire equity shares from Coca-Cola entities, while Jubilant Bevco and an investor consortium will subscribe to compulsorily convertible preference shares (CCPS) in Jubilant Beverages Ltd.
The funding package comprises ₹5,650 crore of debt from the NCDs, CCPS from private capital providers, and an equity infusion from Jubilant Bhartia's holding company, JBCL. The deal values Hindustan Coca-Cola Beverages at an enterprise value of ₹31,250 crore.
Dunkin' Donuts, Hong's Kitchen expansion stalled
Meanwhile, Jubilant FoodWorks Ltd, which operates Domino's Pizza in India, has put expansion plans for Dunkin' Donuts and Chinese fast-casual brand Hong's Kitchen on hold to focus on its core brands amid the group's acquisition of HCCH. Jubilant FoodWorks Ltd has engaged EY to restructure and streamline the business and is also exploring the possibility of selling franchise rights for some of its smaller brands in India, the report said.
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