Overview

BlackRock, one of the world’s largest asset management firms, is reportedly in advanced talks to invest ₹500 crore into the promoter group of B9 Beverages, the parent company of Bira91, via structured debt. The funding comes at a critical time when Bira91 is grappling with liquidity issues, a sharp drop in sales, and high operational losses.

The move is structured in a way that part of the funding will go directly into B9 Beverages as primary capital, while another portion will be used by the founders to buy out early-stage investors, such as Peak XV Partners (formerly Sequoia India) and Sofina.

Additionally, the company plans to launch a ₹100 crore rights issue on May 22, expected to close by June 2025.

🧾 What’s Triggering the Liquidity Crunch at Bira91?

Despite having strong brand recall and a youthful image, Bira91 has faced severe headwinds in FY24, leading to financial stress:

1. Sharp Revenue and Volume Decline

   • Revenue fell 23% YoY to ₹638 crore in FY24 (from ₹824 crore in FY23).

   • Sales volume dropped from 9 million cases to just 6–7 million.

   • This led to a cash flow mismatch and pressure on working capital.

2. High Net Losses

   • Net loss for FY24 stood at ₹748 crore — a continuation of heavy losses from the previous year (₹445 crore in FY23).

   • The company’s cost structure remains highly inefficient, burning cash faster than it can generate revenues.

3. Operational Disruptions

   • A delay in re-registering product labels due to a name change temporarily blocked product movement to market, directly affecting sales and liquidity.

4. Supply Chain & Inventory Pressures

   • Like many consumer product companies, Bira has been hit by supply chain bottlenecks and the costs of holding unsold inventory.

5. Investor Exit Pressure

   • The company is also attempting to facilitate exits for early-stage investors, adding to capital needs at a time when internal accruals are weak.

💸 Deal Structure & Strategic Intent

• Total Structured Debt: ₹500 crore from BlackRock

• Use of Funds:

  • Part will go into B9 Beverages as capital

  • Part will fund promoter buybacks of early-stage investors

• Tranche-Based Disbursement: The funding will be split into two tranches, subject to performance and compliance metrics.

• Coupon-Linked Structure: Expected to be back-ended with a coupon, based on revenue/EBITDA performance

🧠 UnlistedZone View

This deal is a critical capital lifeline for Bira91 but also highlights the inherent risks in scaling a brand-driven, capital-intensive consumer business. While BlackRock’s entry gives confidence, it is important to note that the investment is structured debt, not equity — signaling the risk-reward tradeoff is skewed toward downside protection for the investor.

Until Bira91 shows consistent volume recovery, margin improvement, and operational discipline, the company may remain dependent on external funding to survive and grow. For unlisted market investors, this serves as a reminder that brand strength alone is not sufficient without clear financial sustainability.