Rating Rationale
March 31, 2025 | Mumbai
Sona Beverages Private Limited
'Crisil BBB+/Stable' assigned to Bank Debt
 
Rating Action
Total Bank Loan Facilities RatedRs.60 Crore
Long Term RatingCrisil BBB+/Stable (Assigned)
Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed rationale

Crisil Ratings has assigned its ‘Crisil BBB+/Stable’ rating to the long-term bank facility of Sona Beverages Private Limited (SBPL, part of the Sona group).

 

The rating reflects the group's established brand, extensive industry experience of the promoters and moderate financial risk profile. These strengths are partially offset by exposure to regulatory risk in the liquor industry and to risks related to unrelated investment and extensive exposure to group companies.

Analytical approach

Crisil Ratings has combined the business and financial risk profiles of SBPL and Raipur Bottling Pvt Ltd (RBPL). This is because both these entities, together referred to as the Sona group, operate in the same industry, and have common promoters and operational and managerial linkages.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key rating drivers & detailed description

Strengths:

  • Established brand and extensive industry experience of the promoters: The promoter family has more than four decades of presence in the liquor and distribution business. The group manufactures and sells craft beer under the brand, Simba, which is well-established in India. The group also manufactures Indian-made foreign liquor (IMFL) under its own brands, Black Pearl, Charlie Green Apple, Bombay Malt Whiskey, Jammu Special Whiskey, and ZigZag vodka; apart from processing and bottling IMFL on jobwork basis. Revenue registered a compound annual growth rate of about 30% and was around Rs 380 crore in fiscal 2024. It is likely to grow 25-30% by the end of fiscal 2025 (~Rs 376 crore in the first nine months of fiscal 2025). With the launch of its new country liquor segment in fiscal 2026 and increasing demand for existing brands, sales volume is likely to grow significantly over the medium term as well. A strong market position has also enabled the group to maintain healthy earnings before interest, tax, depreciation, and amortisation (Ebitda) margin of more than 19%, which should continue to support the business risk profile.

 

  • Moderate financial risk profile: Tangible networth is expected to be strong at more than Rs 200 crore as on March 31, 2025. Even with increased debt to fund land acquisition for future capex, gearing should remain moderate at around 1.5 times and total outside liabilities to adjusted networth ratio at 1.7 times. The debt protection metrics are likely to remain comfortable due to high profitability, indicated by interest coverage and net cash accrual to total debt ratios of 3-4 times and 0.2 time, respectively, for fiscal 2025.

 

Weaknesses:

  • Susceptibility to risks related to unrelated investment and to group companies: As on date, the group has invested over Rs 50 crore in its companies in the form of equity, which is more than 20% of its current networth. Furthermore, having taken external debt of more than Rs 200 crore in the past 24 months, the Sona group has extended over Rs 100 crore to multiple associate concerns towards land acquisition for future capex. Any further exposure to group companies impinging on own cash accrual may impact liquidity and will remain monitorable.

 

  • Exposure to regulatory risk in the liquor industry: The Indian liquor industry is highly regulated by the state and central governments, spanning production, wholesale, and retail distribution, raw material availability, and advertisements. Sales and distribution in both the wholesale and retail sectors are governed by each state, depending on whether the market is government-controlled, hybrid, auction-based, or free. This has a significant effect on profitability, particularly in states where the government controls pricing. Distilleries and breweries are required to operate under a licence from each of the state governments; free interstate movement of spirit is also limited. Any regulatory change in one state can possibly alter the entire dynamics of the industry. Also, the country liquor market is highly regulated by the state government. Thus, cash flows are susceptible to material changes in the regulatory landscape.

Liquidity: Adequate

Average bank limit utilisation was around 83% on a consolidated basis. Net cash accrual of Rs 60-70 crore should adequately cover yearly debt obligation of Rs 18-30 crore over the medium term. The group has invested/given advance of Rs 140-150 crore as of March 2025 to multiple group entities. Any further increase in this adversely impacting liquidity will remain monitorable.

Outlook: Stable

Crisil Ratings believes the group will continue to benefit from the extensive experience of its promoters and established relationships with clients.

Rating sensitivity factors

Upward factors

  • Steady improvement in scale of operations by 30% and sustenance of operating margin
  • Significant improvement in financial risk profile

 

Downward factors

  • Drop in operating margin resulting in net cash accrual below Rs 40 crore
  • Further cash outflow to group entities owing to increase in unrelated investments adversely impacting liquidity and financial risk profile

About the group

The Sona group is promoted by Raipur-based Prabhtej Singh Bhatia and his family.

 

SBPL was incorporated in 2006 and manufactures beer at its own brewery in Durg, Chhattisgarh; through its tie-up manufacturing units in various states in India; and through strategic franchising of its brands. The company manufactures and sells craft beer under the brand, Simba.

 

RBPL was established in 1998 as a proprietorship firm (Raipur Bottling Company) by Mr Sucha Singh Rai. It was reconstituted as a private limited company in 2020. RBPL processes and bottles IMFL at its plant in Raipur.

Key financial indicators

As on / for the period ended March 31

 

2024

2023

Operating income

Rs crore

386.36

298.15

Reported profit after tax (PAT)

Rs crore

54.25

38.21

PAT margin

%

14.04

12.82

Adjusted debt/adjusted networth

Times

1.51

1.17

Interest coverage

Times

4.32

5.74

Status of non-cooperation with the previous credit rating agency

SBPL has not cooperated with Brickwork Ratings India Pvt Ltd, which has classified it as non-cooperative vide release dated December 31, 2019. The reason provided by Brickwork is non-furnishing of information for monitoring of ratings.

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 60.00 NA Crisil BBB+/Stable

Annexure – List of entities consolidated

Names of entities consolidated

Extent of consolidation

Rationale for consolidation

Sona Beverages Pvt Ltd

Full

Common promoters, and business and managerial linkages

Raipur Bottling Pvt Ltd

Full
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 60.0 Crisil BBB+/Stable   --   --   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Cash Credit 60 HDFC Bank Limited Crisil BBB+/Stable
Criteria Details
Links to related criteria
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for consolidation

Media Relations
Analytical Contacts
Customer Service Helpdesk

Ramkumar Uppara
Media Relations
Crisil Limited
M: +91 98201 77907
B: +91 22 6137 3000
ramkumar.uppara@crisil.com

Sanjay Lawrence
Media Relations
Crisil Limited
M: +91 89833 21061
B: +91 22 6137 3000
sanjay.lawrence@crisil.com


Argha Chanda
Director
Crisil Ratings Limited
B:+91 33 4011 8200
argha.chanda@crisil.com

Vishnu Sinha
Team Leader
Crisil Ratings Limited
B:+91 33 4011 8200
vishnu.sinha@crisil.com

NILABHRA DAS
Senior Rating Analyst
Crisil Ratings Limited
B:+91 33 4011 8200
NILABHRA.DAS@crisil.com

Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 3850

For a copy of Rationales / Rating Reports:
CRISILratingdesk@crisil.com
 
For Analytical queries:
ratingsinvestordesk@crisil.com



 

Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to Crisil Ratings. However, Crisil Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.


About Crisil Ratings Limited (A subsidiary of Crisil Limited, an S&P Global Company)

Crisil Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).

Crisil Ratings Limited ('Crisil Ratings') is a wholly-owned subsidiary of Crisil Limited ('Crisil'). Crisil Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").

For more information, visit www.crisilratings.com 

 



About Crisil Limited

Crisil is a leading, agile and innovative global analytics company driven by its mission of making markets function better. 

It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint.

It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the US, the UK, Argentina, Poland, China, Hong Kong and Singapore.

It is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

CRISIL PRIVACY NOTICE
 
Crisil respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from Crisil. For further information on Crisil's privacy policy please visit www.crisil.com.



DISCLAIMER

This disclaimer is part of and applies to each credit rating report and/or credit rating rationale ('report') provided by Crisil Ratings Limited ('Crisil Ratings'). For the avoidance of doubt, the term 'report' includes the information, ratings and other content forming part of the report. The report is intended for use only within the jurisdiction of India. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as Crisil Ratings provision or intention to provide any services in jurisdictions where Crisil Ratings does not have the necessary licenses and/or registration to carry out its business activities. Access or use of this report does not create a client relationship between Crisil Ratings and the user.

The report is a statement of opinion as on the date it is expressed, and it is not intended to and does not constitute investment advice within meaning of any laws or regulations (including US laws and regulations). The report is not an offer to sell or an offer to purchase or subscribe to any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way.

Crisil Ratings and its associates do not act as a fiduciary. The report is based on the information believed to be reliable as of the date it is published, Crisil Ratings does not perform an audit or undertake due diligence or independent verification of any information it receives and/or relies on for preparation of the report. THE REPORT IS PROVIDED ON “AS IS” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, CRISIL RATINGS DISCLAIMS WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHER WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, ACCURACY, COMPLETENESS, ERROR-FREE, NON-INFRINGEMENT, NON-INTERRUPTION, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USAGE. In no event shall Crisil Ratings, its associates, third-party providers, as well as their directors, officers, shareholders, employees or agents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

The report is confidential information of Crisil Ratings and Crisil Ratings reserves all rights, titles and interest in the rating report. The report shall not be altered, disseminated, distributed, redistributed, licensed, sub-licensed, sold, assigned or published any content thereof or offer access to any third party without prior written consent of Crisil Ratings.

Crisil Ratings or its associates may have other commercial transactions with the entity to which the report pertains or its associates. Ratings are subject to revision or withdrawal at any time by Crisil Ratings. Crisil Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

Crisil Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For more detail, please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html. Public ratings and analysis by Crisil Ratings, as are required to be disclosed under the Securities and Exchange Board of India regulations (and other applicable regulations, if any), are made available on its websites, www.crisilratings.com and https://www.ratingsanalytica.com (free of charge). Crisil Ratings shall not have the obligation to update the information in the Crisil Ratings report following its publication although Crisil Ratings may disseminate its opinion and/or analysis. Reports with more detail and additional information may be available for subscription at a fee.  Rating criteria by Crisil Ratings are available on the Crisil Ratings website, www.crisilratings.com. For the latest rating information on any company rated by Crisil Ratings, you may contact the Crisil Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 3850.

Crisil Ratings uses the prefix 'PP-MLD' for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on Crisil Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisilratings.com/en/home/our-business/ratings/credit-ratings-scale.html