BENGALURU (Reuters) -Shares in Pepsi India bottler Varun Beverages soared as much as 17.8% to a record high on Wednesday, a day after the company said it would buy South Africa’s The Beverage Company in a deal valued at 13.2 billion rupees ($158.73 million).
Varun Beverages, one of PepsiCo’s largest franchisees outside the United States, is the top gainer on Nifty FMCG Index and was last trading up 11.8% at 1,310 rupees.
The Nifty FMCG Index rose 1.3%.
The Beverage Company makes and distributes PepsiCo-branded and own-branded non-alcoholic beverages in South Africa.
“We see significant value creation opportunity given PepsiCo’s low single-digit share in South Africa,” said analysts at Kotak Institutional Equities in a note.
The analysts added that they expect the Gurugram-based company to focus on PepsiCo’s portfolio and gain share from Coca-Cola and local South African brands.
The deal is expected to be completed on or before July 31, 2024, the company said in a statement on Tuesday.
The stock on Wednesday posted its biggest intra-day jump since June 10, 2021 and is on track for an eighth consecutive quarterly rise, if trend holds.
Including the session’s gains, stock has surged more than 88% this year so far, compared to a 25% gain in the Nifty FMCG Index.
Separately, Varun Beverages also inked a memorandum of understanding with the Jharkhand government on Tuesday to set up a manufacturing plant in the state, with a capital expenditure of 4.5 billion rupees.
($1 = 83.1625 Indian rupees)
(Reporting by Ashna Teresa Britto; Editing by Rashmi Aich)
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