Meet India's Newest Billionaire On Forbes List: Liquor Baron Lalit Khaitan

In a country which is among the fastest-growing markets for liquor, cashing in on that trend of rising consumption is India's newest billionaire who is a liquor baron.

Who Is India's Newest Billionaire?

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India's newest billionaire is 80-year-old liquor baron Lalit Khaitan. He is the chairman of the $380 million (revenue) Delhi-based Radico Khaitan, best known for beverages such as 8 PM whisky, Old Admiral brandy, Magic Moments vodka and Rampur single malt, distilled in the foothills of the Himalayas, as per Forbes.

How Did He Become A Billionaire?

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Shares of the publicly traded alcohol company Radico have jumped 60% this year on rising sales and with the launch of new drinks such as Happiness in a Bottle gin. This propelled Khaitan into the three-comma club with an estimated net worth of $1 billion based on his 40% stake in the company. According to Lalit Khaitan, his father was a teetotaler throughout his life, and even Khaitan himself had never tasted alcohol until his father bought the distillery. Khaitan inherited what was then a small liquor business in 1995 from his late father G.N.Khaitan, who in turn had bought the erstwhile Rampur Distillery and Chemical Company in the 1970s.

Analysts say that Radico Khaitan¡¯s long-term strategy of expanding its basket of premium brands is paying off. ¡°With more than 15 new brand launches in the past 15 years, the company has successfully built a strong and growing premium product portfolio driven by consumer preferences,¡± as per a December research report by Mumbai-based Sharekhan, the Indian retail brokerage unit of France¡¯s BNP Paribas.

Indians are consuming more expensive alcoholic beverages, hence, the premium segment now accounts for a third of total sales volumes, up from 26% in 2018. Today, Radico Khaitan is one of the largest makers of what¡¯s called Indian Made Foreign Liquor (IMFL) and gets 80% of its revenue from that segment.

Also Read: This Beer Billionaire Reveals Why He Buys A Random Stock Once Every Two Weeks

When Did The Company Start?

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Khaitan¡¯s 80-year-old company, which began in 1943, started off as a bottler and went on to make bulk alcohol before latching onto branded beverages in 1997 when Khaitan¡¯s marketing-savvy son Abhishek joined the business. The industry is even more frothy today. According to IWSR, a London-based data provider, alcohol volumes in India will grow at a compounded rate of 4% between 2022 and 2027, four times higher than the global average. As per the Forbes report, sales of alcoholic beverages in India are projected to touch $64 billion by 2027, up from $52 billion in 2021, according to a November report from the International Spirits and Wines Association of India, a Gurgaon-based trade body. This is because of increasing urbanisation and a rising working population.

Also Read: Not Apple, This Company That Made Steve Jobs A Billionaire For The First Time

Who Are Its Competitors?

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While Radico Khaitan is well-positioned to benefit, it has to contend with a slew of competitors. The biggest competitor is United Spirits, a listed subsidiary of Diageo, which was once controlled by flamboyant liquor tycoon and former billionaire Vijay Mallya, who¡¯s now a fugitive in London. Others include Mumbai-based Allied Blenders & Distillers, maker of the popular Officer¡¯s Choice whisky, which is poised for a public listing, and niche producers such as Goa-based Stilldistilling Spirits India, manufacturer of Maka Zai rum and Third Eye Distillery Holdings, which makes Stranger & Sons gin. This week Coca Cola India made a splash by introducing Lemon-Dou, a concoction of distilled liquor comparable to brandy or vodka.

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