A name change takes the fizz out of Bira's earnings

Dropping one word—private—from its name cost B9 Beverages, the public listing-bound maker of Bira 91 beer, Rs80 crore directly and a financial year with ballooning losses.

Ahead of the planned 2026 IPO, the company changed its name from B9 Beverages Private Ltd to B9 Beverages Ltd. This change of name and associated compliance issues meant the company had to write off Rs80 crore in inventory and halt sales for a few months, while it completed registering its new product label, causing losses to widen 68% in FY24, the company said. Sales fell by more than a fifth.

The corporate actions at B9 Beverages came amid surging competition from microbreweries, craft beer makers, and global brewers launching premium brands in this growing market. B9 Beverages incurred a net loss of Rs748 crore in the year ended March 2024. Losses during the year surpassed its total sales of Rs638 crore, which fell 22% from FY23.


“Due to the name change, there was a 4-6 month cycle where we had to re-register labels and re-apply across states which resulted in literally no sales for several months despite demand for our products. While availability dwindled, we also saw policy and route to market changes in Delhi NCR and Andhra Pradesh, which accounts for more than a third of our sales," said Ankur Jain, founder at B9 Beverages Ltd. Consequently, sales fell to 6-7 million cases in FY24 from nine million in FY23.

A decade ago, Bira started by importing the Hefeweizen-style beverage from Belgium but later started brewing in India due to cost advantages though it eventually added half a dozen third-party breweries.

"Negative cash flow of Rs84 crore and accumulated losses of Rs1,904 crore which eroded its full net worth indicate the existence of material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern,” observed B9’s auditor in its latest annual report.

According to the company, beer, as a segment, needs high capital expenditure and working capital allocation to grow, and it is in the midst of raising fresh funds to drive its growth plans. It also attributed its losses to a one-time write off of inventory which had the company's old name.

"We had to write off Rs80 crore worth of products due to the name change which amounted to Rs80 crore one-time cost, directly impacting our profitability. However, growth is back since the third quarter, and we expect to make operating profit by next quarter and have enough scale and size to raise capital by 2026,” it said.

Experts feel the importance of new age brands like Bira is not just in sales volume but also in terms of bringing experimentation and innovation in the category.

"They complement the mainstream beer industry. But what these companies must bear in mind is that the appeal of a new different taste palate, whether wheat, dark lager, or craft is rooted in its uniqueness. So, their growth ambitions and expansion strategy should resist temptations of a quick scale up to become a mainstream product. That will just dilute the uniqueness of the product in consumers’ mind and would be neither here nor there," said Vinod Giri, Director General of Brewers Association of India (BAI). "So they must follow a business model which balances investor expectations of quick returns with the rate of consumer accretion that the point of difference in the product naturally permits."

A host of brands from Simba, BeeYoung and Kati Patang followed suit to tap India – a warm, tropical country with promising demographics and increasing affluence. In addition, established global brewers have stated their ambitions to invest in India, a country they consider among their top three priority markets.

In an investor call on Friday, United Breweries chief executive Vivek Gupta said it will invest Rs750 crore to set up a new brewery in Uttar Pradesh, its first greenfield expansion in more than a decade. Last week, Jacob Aarup-Andersen, CEO, Carlsberg, told analysts that while India is a volatile and complex market to operate in, the Danish brewer will step up investments in 2025. Besides increasing capex to ensure sufficient capacity for the 2026 season, Carlsberg plans to invest in sales and marketing.