B9 Beverages, the parent company behind India’s celebrated craft beer label Bira, is undergoing a seismic shift—one that underscores the harsh economic headwinds of the brewing industry while signaling a bold push toward survival and future profitability.
Discounted Rights Issue: Raising ₹100 Crore Amid Tough Times
In a decisive move to shore up working capital, B9 Beverages has initiated a ₹100 crore rights issue—₹85 crore of which has already been secured by selling fresh shares to existing investors at a striking 55% discount. The shares, priced at ₹325 apiece, are a significant markdown from the ₹718 valuation set when Japanese beer giant Kirin invested in a prior round.
This rights issue—an offer made to existing shareholders to purchase additional shares at a discounted rate—has already attracted over 300 investors, including a major family office making its debut in the company. The remaining ₹15 crore is expected to be raised by mid-July.
Sharp Workforce Reduction & Cost Control Measures
The price discount is only one facet of B9’s multi-pronged strategy to stay afloat. Over the past two years, the company has undergone a dramatic reduction in headcount—shrinking from around 975 employees to just 500. Many former employees opted to sell their employee stock options (ESOPs), flooding the secondary market with shares.
This leaner team structure is part of a larger effort to cut fixed costs and streamline operations. With salaries now reportedly up-to-date and pending liabilities largely cleared, B9 is stabilizing its labor front even as it repositions its business model.
A Strategic Pivot: From 30 Markets to the Metro Core
B9 Beverages is also taking a razor-sharp approach to market prioritization. Once present in 25-30 major markets, the company has narrowed its focus to a few metros and select tier-II cities. In particular, Andhra Pradesh, Delhi, Uttar Pradesh, and Maharashtra are now seen as the growth engines, contributing to 55% of the firm’s revenues.
Manufacturing capacity has been deliberately scaled back—from 25 million to 15 million cases—to improve utilization rates and reduce factory overheads by 50%. The move is not merely about downsizing but about smarter resource allocation and operational efficiency.
Shifting to a Distribution-First Model
Another key component of B9’s transformation is its move toward a distribution-centric model. The company has transitioned four of its partner breweries away from exclusive manufacturing agreements, signaling a shift to contract manufacturing. Only two facilities—Gwalior and Nagpur—will remain dedicated solely to Bira production.
This pivot is expected to yield substantial savings—up to ₹600 crore annually—and raise margins to 66% by FY26, from the current 63%. With tighter marketing budgets focused on in-store promotions, B9 expects to achieve a leaner, more agile presence in the market.
Funding Momentum and Delayed IPO Timeline
Beyond the rights issue, B9 Beverages is also preparing for a much larger ₹800 crore fundraising round, in which some early backers may choose to cash out. These efforts come as the company adjusts its IPO plans, originally slated for 2026 but now postponed to 2028.
The cap table is notably complex, with multiple share classes and common equity holders holding a relatively minor stake. Nevertheless, investor confidence appears to remain steady, especially given the deeply discounted entry point and the company’s consolidation strategy.
A Glimpse into Financial Realities
The challenges remain steep. FY24 filings revealed a significant dip in operating revenue—from ₹824.3 crore in FY23 to ₹638.5 crore in FY24—while net losses nearly doubled to ₹748.8 crore. Freight costs, state levies, and capital-intensive infrastructure continue to erode margins across the sector.
However, the company’s investor deck projects a brighter horizon: with better utilization rates, lower fixed costs, and a more focused marketing and distribution strategy, B9 Beverages is positioning itself for a turnaround.
India’s Fourth-Largest Brewer Faces Its Crossroads
As of May 2025, Bira is India’s fourth-largest beer company by volume, with an annual manufacturing capacity of 2.1 million hectolitres. But with industry titans like Kingfisher, Carlsberg, and Budweiser-maker AB InBev holding an 86% grip on the market, B9’s turnaround efforts will be closely watched.
Investor appetite—buoyed by the deep discount and a revitalized roadmap—may very well provide B9 Beverages the breathing room it needs. But the company’s ability to execute on its revised strategy, retain consumer loyalty, and navigate regulatory and tax headwinds will determine whether this bold bet yields lasting results.
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This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.