Coca-Cola has sold a 40 per cent stake in Hindustan Coca-Cola Holdings Pvt Ltd (HCCH) to Jubilant Bhartia Group. HCCH is the parent company of Hindustan Coca-Cola Beverages Pvt Ltd (HCCBL), the largest Coke bottler in India.

While commercial terms of the deal were not disclosed, media reports pegged it at around ₹12,500 crore.

A statement from Jubilant Bhartia Group said it has entered into a definitive agreement for the stake, which will be undertaken by Jubilant Beverages Ltd.

The transaction is subject to regulatory approval.

Coca-Cola in a separate announcement said it would continue to drive sustainable, long-term growth by investing in the opportunities available in India and the locally owned franchise partners are positioned to drive successful outcomes. India is the fifth largest market of Coca-Cola.

The transaction with the Jubilant Bhartia group is seen as part of Coca-Cola’s asset-light strategy.

Rival Pepsico is following a similar strategy, having outsourced its bottling operations to Varun Beverages.

The cola giants are facing stiff competition from Reliance Consumer Products Ltd, which has shaken up the market by selling Campa Cola at low prices.

Earlier this year, Coca-Cola announced HCCB will transfer its bottling operations to local partners in three regions — Rajasthan, Bihar, and Northeast and parts of Bengal to its existing partners.

Shyam S. Bhartia, founder and chairman, and Hari S Bhartia, founder and co-chairman of Jubilant Bhartia Group, said the investment is an ideal addition to their business.

“Together, we will leverage opportunities to grow the business to greater heights and ensure more Indian consumers can enjoy The Coca-Cola Company’s refreshing portfolio of iconic local and international brands,” they added.

In October, the news agency IFR reported that the controlling shareholders of Jubilant Bhartia Group were planning to raise $1.4 billion from a mix of rupee bonds and structured debt or equity to fund the stake buy in HCCB.

Coca-Cola operates in the Indian market with two entities — Coca-Cola India and bottling arm HCCBL.

Its products include Coca-Cola, Thums Up, Sprite, Minute Maid, Maaza, SmartWater, Kinley, Limca and Fanta.

Coca-Cola India, which takes care of branding and other business, reported a consolidated revenue of ₹4,713.38 crore in 2023-24. On the other hand, HCCBL’s revenue was up 10.10 per cent to ₹14,021.54 crore during the year.

“This strategic investment represents an important milestone in our journey. Jubilant Bhartia Group’s expertise, complements our strengths, ensuring that we continue delivering exceptional value to our stakeholders while driving innovation and sustainable progress,’’ Juan Pablo Rodriguez, CEO of Hindustan Coca-Cola Beverages, said.

The Indian beverage sector is seeing steady growth, with revenue generated from non-alcoholic beverages expected to reach over $24 billion by 2027 from $17 billion in 2023, a report from data firm Statista showed.

Jubilant Bhartia Group’s Jubilant FoodWorks is a leading quick service chain operator in India. With inputs from Reuters