Fratelli Vineyards, India’s second-largest wine brand with a 35% share in the domestic market, is set to list its shares on the stock exchanges, 4 months after a share-swap transaction with a listed sister company, Tinna Trade Ltd., according to a news report in Mint. The company became Fratelli Vineyards after the share swap.

Despite a slowdown in the world wine market, Fratelli achieved a CAGR of around 18% during the last 4 years after Covid-19, and achieved sales of Rs. 247 crore (Rs.2.47 billion) in FY 2024 with sales of Rs. 129.5 crore in FY2021. According to Gaurav Sekhri, the elder brother of late Kapil Sekhri who had been the prominent partner in the wine company with 3 sets of brothers (Fratelli) as investors, is the Chairman and Managing Director of both Fratelli and Tinna Trade. The wine company founded in 2007, is slated to become a Rs. 650 crore enterprise in another 4 years, by 2028.

In March this year, BSE-listed Tinna Trade, a farm commodity trader, had acquired a 100% stake in Fratelli Wines Pvt Ltd through a share-swap deal. Tinna Trade has been a multibagger company with its shares skyrocketing from a Low of Rs. 23 to Rs. 462.5 (price at BSE on 8 August), within one year.

Also Read : Sula Vineyards Files Documents for the IPO

Fratelli Vineyards raised Rs. 72.6 crore in the last two years, with plans to expand its production capacity from 500,000 cases to 1.5 million cases annually, according to the Report. Currently, it has four wineries in Maharashtra and Karnataka, with a total capacity of 4.7 million liters.

According to wine and spirits consultancy IWSR, India’s wine market is projected to grow at 10% per annum till 2027. In 2022, India’s consumption of wine by volume increased by a healthy 19%, while spirits in general climbed 2%, beer by 38%, and ready-to-drink products surged 40% though on a small base.

Also Read : From Archives (2010): Brothers Bond to Bring Indo-Italian Blend

This is the second public issue from a wine producer in India, if one does not count shares issued by Chateau Indage in the 1990’s, a company founded by Late Sham Chougule, that was truly international in character, aiming ambitiously to be an MNC but fell on the wayside during the Lehman Bros. global crisis of 2008-9 and eventually went bankrupt.

Issued at Rs. 357 a share, Sula Vineyards, the leading producer, had come out with their public issue (IPO) in December 2022. The shares have oscillated between Rs. 699-447 in the last 12 months, closing at around Rs. 482 on Monday, 8 August commanding a premium of Rs. 125 over the issue price.

Imported wines a threat

Gaurav claims that some of Indian wines are far superior in quality at similar price points to imported wines (understandably including the import taxes and excise duty). But he is worried that imported wines are likely to cause a risk to the entire domestic industry as Indian consumers might prefer imported wines over Indian ones due to perceptions of quality, He asks for continuous support from the government.

Product mix

According to Gaurav, 70% of the revenue came from luxury, super-premium, and premium segments last year. The premium segment contributes 60% of revenues whereas its strongest area is the luxury segment (priced above Rs. 2,000) and the ready-to-drink RTD) wine- in- a- can segment. The business has achieved around 20% growth rate (18% CAGR) over the past four years, as against the industry average of 15%. Fratelli exports to over 10 countries including Italy from where 2 of their partners Andrea and Alessio Secci come, but only 5% of its business comes from international markets.

Also Read : Fratelli Wines: Sekhri Family carries on the Legacy of Kapil Sekhri

In terms of luxury, the company’s focus has been strongly on the luxury category for the last decade.  In 2012, it launched SETTE for the first time in its premium price segment. It retails at Rs. 1800-2000. In 2018, it launched its most expensive limited edition wines- J’Noon in collaboration with Jean Charles Boisset, a Burgundian now settled in California, producing high quality wines.

The company is also a leader in crafting private labels for hotels and is a leader in this segment.

Those of our readers who would like to become part owners in an Indian wine producing entity and missed out the opportunity in Sula Vineyards may like to look at this Issue as more information starts trickling in the financial and trade magazines.

Subhash Arora