Pernod Ricard intends to borrow up to $240.4m in a bid to break the dominance of Diageo-controlled United Spirits's share in the Indian spirits market.
United Spirits holds one third of the share in the Indian market.
Without mentioning any time frame, Pernod Ricard said in a filing with the Registrar of Companies that the firm is raising its borrowing limit to $240.4m.
Pernod Ricard India spokesperson was quoted by Economic Times as saying: "A resolution was passed by the board of directors to increase the aggregate borrowing limit for ongoing business operations and working capital requirements."
Last June, the French firm Pernod, which is the world's second-largest distiller, borrowed $144.26m. This investment helped its Indian unit to maintain its growth rate steadily at 19% over the last two years even though the market had been stagnant.
Diageo, which owns brands such as Johnnie Walker and Smirnoff, holds a strong position in the Indian market. Its USL owns mass brands such as McDowell's, Bagpiper and Director Special, among others. These mass brands together have 36% share in terms of volume in the Indian market.
Pernod Ricard's revenues and profits significantly come from just three major whisky labels - Royal Stag, Seagram's Imperial Blue, Blender's Pride - and 100 Pipers scotch. On the other hand, United Spirits has more than 25 brands.
Image: Pernod Ricard's major whisky label Blender's Pride. Photo: Courtesy of Pernod Ricard.
