Jubilant Bhartia Pops the Cap: Rs 5,600 Crore Bond Issue to Fund Coca-Cola Stake

Image Source: ET Now

Strategic investment revealed

Jubilant Bhartia Group is set to raise Rs 5,600 crore via non-convertible debentures. The funds will be used to fund its Rs 12,650 crore purchase of a 40 percent stake in Hindustan Coca-Cola Holdings, the parent of Coca-Cola's largest bottling partner in India.
Funding details
- Jubilant Beverages Ltd will offer Rs 2,650 crore of fully paid-up, unsecured, rupee-denominated, listed-rated, redeemable non-convertible debentures
- Jubilant Bevco Ltd to raise Rs 3,000 crore through a comparable bond offering
- Both bond offerings are in the form of zero-coupon papers with maturities of almost three years
- The implied annualized yields are 9 percent for Jubilant Beverages and 9.15 percent for Jubilant Bevco
- An increase in internal rate of return by 25 basis points in the event of a downgrade in credit rating is provided through a step-up clause
Investor participation
- Eight anchor investors have pledged Rs 900 crore in the Jubilant Bevco tranche
- Six anchor investors, including large mutual funds, have pledged Rs 795 crore in the Jubilant Beverages issue
- The public offering is expected to open on June 4

Expansion strategy and market impact
- Jubilant FoodWorks, a subsidiary, is changing its focus from Dunkin' Donuts and Hong's Kitchen to focusing more on Domino's Pizza and Popeyes
- The deal reinforces Jubilant Bhartia's footprint in India's rapidly growing beverage market
- The December 2024 announced deal was approved by the Competition Commission of India on May 1, 2025

Structure of transaction
- Jubilant Beverages Ltd will purchase equity shares from Coca-Cola entities
- Jubilant Bevco and an investor group will subscribe compulsorily convertible preference shares in Jubilant Beverages Ltd
- The financing mix consists of Rs 5,650 crore of debt, private capital providers' preference shares, and the balance through equity infusion by Jubilant Bhartia

Future prospects
This strategic investment is testimony to Jubilant Bhartia's faith in India's food and beverages industry. By utilizing its know-how and financial muscle, the group plans to drive growth and strengthen its market position.

Sources: Economic Times, Jubilant Bhartia Group, Hindustan Coca-Cola Holdings, Coca-Cola India