Nikhil Kamath, billionaire investor and co-founder of Zerodha, revealed his significant investment in Radico Khaitan during his podcast, ‘WTF is’. Radico Khaitan is known for popular alcohol brands such as Magic Moments vodka, 8PM whiskey, Rampur premium Indian single malt whiskey, and Jaisalmer Indian craft gin. Kamath mentioned that he holds around 1.6-1.7 percent stake in Radico Khaitan, an investment valued at approximately Rs 400 crore.
Insights from the Podcast
On the latest episode titled ‘WTF, Alcohol is a $70B Business in India?’, Kamath discussed his investment journey with guests including Abhishek Khaitan, MD of Radico Khaitan, Minakshi Singh, co-founder of SideCar, Shuchir Suri, co-founder of Gin Explorer’s Club, and Suraj Shenai, founder of Goa Brewing Co. Kamath described his role as a “miniature partner” to Abhishek in the business, emphasizing the success of his investment.
Investment Strategy and Market Performance
Kamath revealed that his stake in Radico Khaitan was acquired through the open market and has proven to be a lucrative investment. Analysts are optimistic about the alcoholic beverage industry, particularly Radico Khaitan, which has shown strong premiumisation-led growth. In 2023, Radico’s millionaire brands grew by 7 percent year-on-year, with 1965 Spirit of Victory Rum crossing a million cases, bringing the total number of millionaire brands to seven.
Radico Khaitan’s Market Position
Radico Khaitan has outperformed its peers, with a compound annual growth rate (CAGR) of 7 percent over four years, compared to flat growth for United Spirits and 2 percent for Pernod Ricard. The reopening of restaurants and bars has boosted sales of Magic Moments vodka, making it the 6th largest vodka brand globally. The company’s focus on upgrading consumers from 8PM to 8PM Premium Black has also shown positive results, with the latter’s volume growing by 18 percent.
The Radico Khaitan Story
Founded in 1973, Radico Khaitan has grown to become one of India’s oldest and largest manufacturers of Indian Made Foreign Liquor (IMFL). Abhishek Khaitan’s father, GN Khaitan, purchased the company from Sanjay Dalmia of the Dalmia Group. Abhishek Khaitan, who joined the company after completing his engineering in 1996, shared his journey of transforming the business. Despite initial struggles, including a significant liability and the loss of a major bottling contract, Khaitan’s vision and persistence helped Radico Khaitan evolve into a leading brand in the alcohol industry.
Overcoming Challenges
Abhishek Khaitan recounted the challenges he faced in his early years with the company. From a turnover of Rs 70 crore and liabilities of Rs 50 crore, he navigated the business through difficult times. His innovative approach, including changing the company name from Rampur Distillery and Chemical Company to Radico, played a crucial role in the company’s turnaround.
Nikhil Kamath’s strategic investment in Radico Khaitan reflects the potential and growth of the Indian alcoholic beverage industry. With a focus on premiumisation and market expansion, Radico Khaitan continues to thrive, positioning itself as a major player in the global alcohol market.
