Nikhil Kamath on his Rs 400 crore investment in Radico Khaitan

Business MInutes

Nikhil Kamath, a billionaire investor and co-founder of Zerodha, recently spoke about his investment in Radico Khaitan, makers of alcohol brands such as Magic Moments vodka, 8PM whiskey, Rampur premium Indian single malt whiskey, and Jaisalmer Indian craft gin. In his podcast episode 'WTF, Alcohol is a $70B Business in India?', Kamath revealed that he has around 1.6-1.7 per cent stake in Radico Khaitan. The stake was bought in the open market and is around Rs 400 crore. 

As Kamath said, Radico has done rather well, with analysts largely positive on the alcoholic beverage industry. They see strong premiumisation-led growth for players like Radico Khaitan over the next three years. Antique Stock Broking noted that Radico Khaitan outperformed peers with a strong premiumisation trend, with its millionaire brands growing 7% year-on-year in 2023. Radico's volume growth of 29% YoY to 6.2 million cases has made it the 6th largest vodka brand globally. 

The company's focus on upgrading consumers from 8PM to 8PM Premium Black is gaining traction, with the latter's volume growing 18% to 3.3 million cases, while 8PM's volume declined 2% to 8.9 million cases. The company's history began with Abhishek Khaitan's father, GN Khaitan, buying the company from Sanjay Dalmia, Chairman of the Dalmia Group, in 1973. Khaitan had always wanted to create a brand since his school days, but his mother dissuaded him from becoming a Chartered Accountant. He landed up in Bangalore for his engineering studies and visited pubs in Bangalore, which helped him develop his passion for alcohol. 

After completing his engineering in 1996, Khaitan joined the company but faced several challenges, including a bottling contract with a leading player in India and a turnover of Rs 70 crore. Khaitan approached his father to reason with him and convince him to create a brand. The biggest challenge was getting the leadership to agree to changing the name of the company from Rampur Distillery and Chemical Company to Radico, an abbreviation.

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