Varun Beverages takes to PE route for expansion

Varun Beverages International will acquire Rs 250 crore via PE funding by Standard Chartered Bank's private equity arm. The deal values the company at more than $1 billion. Under the terms, Varun Beverages will issue five per cent stake to Standard Chartered Private Equity through fresh equity. The funds will be utilised in expansion of PepsiCo's bottling businesses in India and overseas markets such as Morocco, Nepal and Sri Lanka. Varun Beverages International owned by RJ Corp's is PepsiCo's biggest bottler in South, Asia. It controls PepsiCo bottling operations of RJ Corp in Sri Lanka, Morocco, Nepal and parts of India.

RJ Corp owns PepsiCo India’s biggest franchisee bottling business and runs around 13 PepsiCo bottling plants in India and overseas. It controls most of PepsiCo's bottling operations in India and is also the holding company of Varun Beverages India, which controls the residual franchisee bottling businesses of the group.

RJ Corp is looking for its bottling business to touch $1 billion in the next three years. Moreover, Varun Beverages has plans to launch an IPO in 2014.