**B9 Beverages Secures ₹100 Crore in Rights Issue Amidst Restructuring**
B9 Beverages, established by Ankur Jain in 2015, is set to raise ₹100 crore through a rights issue aimed at bolstering its working capital. An additional ₹15 crore is anticipated to be secured by mid-July, according to sources who requested anonymity. The shares are being offered at ₹325 each, representing a significant 55% discount compared to a previous investment round where Japanese beer producer Kirin acquired shares at over ₹700 each. Currently, B9 boasts around 6,500 private investors, with a prominent family office expected to join as a new investor.
In a strategic move to manage costs, B9 has renegotiated its agreements with four breweries, which will no longer produce exclusively for the company. This decision comes as B9 is also in the process of raising ₹800 crore, allowing some early investors the opportunity to cash out. A rights issue enables companies to raise funds by offering existing shareholders the chance to purchase additional shares, typically at a discounted rate proportional to their current holdings.
The company has faced challenges, including a significant reduction in its workforce from approximately 975 employees to around 500, partly due to an exodus of employees cashing in their stock options. Interestingly, B9 now has more shareholders than restaurant aggregator Zomato had prior to its IPO, according to a company insider.
The beer production sector is known for its capital-intensive nature, with states claiming nearly two-thirds of its revenues and high freight costs impacting profitability. Recent filings reveal that B9 Beverages’ operating revenue fell to ₹638.5 crore in FY24 from ₹824.3 crore in FY23, while losses widened to ₹748.8 crore in FY24 compared to ₹445.4 crore the previous year. Originally planning to go public in 2026, the company has postponed its IPO to 2028.
As of June 16, when part of the rights issue closed, B9 had multiple share classes, with equity holders owning only a small fraction of the total shares. The rights issue has already garnered commitments for about 85% of the targeted amount, with over 300 investors participating, including the new family office investor. The current share price offers a compelling opportunity for employees and investors alike, given the substantial discount from previous valuations.
**FAQ**
*What is a rights issue?*
A rights issue is a method for companies to raise capital by offering existing shareholders the opportunity to purchase additional shares at a discounted price, proportional to their current holdings.
