Is Kishore Chhabria-led ABD’s IPO timing off?

Why read this story?

Editor's note: For an initial public offering that has been over a decade in the making, Kishore Chhabria may have chosen to list his Allied Blenders and Distillers at the most uncertain of times. High interest rates, cuts in GDP growth estimates and spiraling inflation have left investors jittery.  It’s not just about the timing. The ABD chairman has also chosen to take his company public when it’s well past its peak. Sales of its best-selling whiskies, including Officer’s Choice, have stagnated and ABD has lost ground to peers such as Diageo India (earlier United Spirits) and Pernod Ricard India.  The country’s third largest seller of Indian-made foreign liquor, or IMFL, also faces financial stress. This is what it said in its draft red herring prospectus, filed with market regulator Securities and Exchange Board of India on 28 June: “We have incurred indebtedness and an inability to comply with repayment and other covenants in our financing agreements could adversely affect our business and financial condition.”  Not surprisingly, much of the Rs 2,000 crore that Chhabria hopes to raise from the listing will …