Introduction

Once a poster child of India’s premium beer startup ecosystem, Bira 91 is now going through a tough phase. After showing significant promise and raising millions from global investors, the company faced major disruptions over the last one year — affecting operations, cash flows, and investor sentiment. What went wrong, and where is Bira heading now?

What Went Wrong?

1. Conversion from Private to Public Limited

In FY24, Bira took the step to convert from a private limited company to a public limited company — an essential move to prepare for a future IPO or structured fundraising. However, this transition wasn't smooth.

During this period, state excise authorities in multiple regions failed to promptly renew Bira’s licenses, citing changes in company structure. This directly halted production and sales in key markets for several months, resulting in a significant revenue hit.

2. Operational Freeze Due to Excise Rules

The biggest issue was regulatory ambiguity around excise policies. Since alcohol is a state-regulated business, each state has different rules for license renewal. When Bira changed its corporate structure, many state excise departments treated it as a “new entity,” delaying license transfers.

This red tape led to:

• Temporary shutdown of breweries

• Disrupted supply chain and market presence

• Declining revenue despite high demand

Current Fundraising: Right Issue in Focus

To stabilize operations and rebuild momentum, Bira has now brought in a Right Issue — an offer to existing shareholders to subscribe to new shares at a pre-fixed price.

✅ Amount Being Raised: ₹100 Crores

✅ Price per Share: ₹325

✅ Rights Ratio: 1:7 (i.e., 1 new share for every 7 held)

✅ Purpose:

• Working capital needs

• Payment of outstanding vendor dues

• Relaunch and reactivation of operations post disruptions

Valuation & Learning for Unlisted Investors

Let’s break down the valuation:

• Pre-money equity base: 21,830,750 equity shares

• CCPS (Convertible Preference Shares) outstanding: 38,092,815

• ESOPs - 3,611,496

• OCPS - 123,750

• Implied Equity Valution of Right Issue:  63,658,811*325 = INR 2100 Cr.

• This valuation is a sharp decline from earlier levels when Bira was raising money at significantly higher multiples from investors like Sequoia and Sofina. 

💡 Learning for Investors:

Many unlisted investors bought Bira shares expecting a bumper IPO — riding on the success of the brand. However, poor policy handling and weak contingency planning erased months of business growth.

In the unlisted space, valuation is not just about brand — execution and regulatory preparedness matter equally.

What Lies Ahead?

Bira has started stabilizing operations and is working towards:

• Re-establishing its distribution network

• Rolling out marketing campaigns again

• Exploring long-term fundraising to fuel growth

But until consistent revenue visibility returns, investors must remain cautious.

Conclusion

The Bira 91 story is a classic reminder for unlisted market participants:

A strong brand without operational clarity can quickly lose market momentum.

While the current right issue gives existing shareholders a chance to average their costs and support the company, fresh investors should wait for execution visibility before re-entering.

Stay updated with UnlistedZone for more such deep-dive analyses.

For more such deep-dive analysis, visit UnlistedZone.com