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Varun Beverages Acquires 39.93% Stake In Lunarmech Technologies

Updated on: Dec 17, 2024, 3:24 PM IST
Varun Beverages acquires 39.93% in Lunarmech for ₹200 crore, making it a wholly-owned subsidiary, shares trade at ₹646.65, up 30.11% YTD.
Varun Beverages Acquires 39.93% Stake In Lunarmech Technologies
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

Varun Beverages Limited (VBL), a key franchisee of PepsiCo, has completed the acquisition of a 39.93% equity stake in Lunarmech Technologies, making it a wholly-owned subsidiary. The acquisition became effective on December 16, 2024, following regulatory approvals and exchange filings.

Acquisition Details

VBL acquired the remaining 39.93% of Lunarmech for a transaction value of ₹200 crore, Lunarmech Technologies is into manufacturing plastic closures for PET bottles, a product primarily used in-house by Varun Beverages.

The company currently operates a manufacturing facility in Jaipur and is constructing a second facility in Jammu, boosting its production capacity to meet growing market demands. Lunarmech reported a net revenue of ₹183.4 crore in FY 2023-24.

Strategic Context

This acquisition is part of Varun Beverages’ strategy to strengthen operational capabilities and improve production. Alongside this, VBL announced acquisitions in Tanzania and Ghana to expand its global presence. These include:

  1. SBC Beverages Tanzania Limited (SBCT):
    • Transaction Value: ~USD 154.50 million (₹1,304 crore)
    • Operations: 5 facilities with 12 manufacturing lines across Dar-es-Salaam, Mbeya, Arusha, and Mwanza
    • Market Performance: FY24 revenue of TZS 474,939 million (₹1,505 crore) and sales of 74 million 8oz cases
  2. SBC Beverages Ghana Limited (SBCG):
    • Transaction Value: ~USD 15.06 million (₹127.1 crore)
    • Operations: 1 facility in Accra with 2 RGB manufacturing lines
    • Market Performance: FY24 revenue of GHS 62 million (₹32 crore) with sales of 2.25 million 8oz cases

Share Price Movement

As of 2 PM today, Varun Beverages’ shares wereare trading at ₹646.65, marking an increase of 1.25 points (0.19%). On a year-to-date basis, the stock has delivered a 30.11% return.

Financial Performance

For the recent quarter, VBL reported revenue of ₹3,086 crore, compared to ₹5,801 crore in the previous quarter. The net profit for the period stood at ₹492.34 crore, with earnings per share (EPS) at ₹1.52.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

Published on: Dec 17, 2024, 3:24 PM IST

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