Pepsi Bottler Ravi Jaipuria Is Newest Indian Billionaire

Water of the flavored kind has made Jaipuria, 58, a fortune: PepsiCo’s largest franchise bottler by far in India–he claims to be among the multinational giant’s top three globally-is India’s newest billionaire with a fortune estimated at close to $1.5 billion.

Jaipuria gets a chunk of that wealth from bottling unit Varun Beverages, which accounts for 55% of RJ Corp’s revenues. Named after his son who works with him, Varun Beverages has 10 bottling plants in India plus an international footprint that includes Sri Lanka, Nepal, Morocco, Mozambique and Zambia.  It claims to have close to a third of Pepsi’s business in India and that may well be true. While a PepsiCo India spokesman says that production figures relating to individual bottlers are not in the public domain, he confirms that half its beverage volume is from seven franchise bottlers of which Varun Beverages is the biggest.

To fund what some say is an unquenchable thirst for growth, Jaipuria sought out private equity for the first time in 2011. Standard Chartered’s  private equity arm has invested $78 million in two tranches for about 8% in Varun, valuing the bottling unit  at nearly $1 billion. Jaipuria is planning to take the company public “either later this year or in 2014,” he discloses.

Meantime, he’s further cementing his position as India’s bottling king. Last week, he sealed a deal for an estimated $75 million to acquire his older brother Chandra Kant Jaipuria’s bottling business in Delhi’s national capital region, the biggest metro market for soft drinks in the country. “Delhi is as big as Mumbai, Chennai and Kolkata put together,” says Jaipuria looking obviously elated over his latest coup. “In the north, people will drink a whole bottle. Elsewhere, people tend to share and we have to compete with coconut water,” he adds by way of explanation.

Another fast-growing part of Jaipuria’s empire is fast foods which is benefiting from an eating-out culture that’s caught on among urban Indians. RJ Corp’s Devyani International (named after Jaipuria’s daughter) has the franchise for Pizza Hut and KFC, both part of Yum! Brands as well as that for the UK’s Whitbread Group’s coffee chain Costa Coffee.  Devyani also includes American ice cream chain Swensen’s and a south Indian fast food chain Vaango, which means ‘please come’ in Tamil. With 350 outlets in all, this business is growing in double digits.

Here too Jaipuria has sought private equity; ICICI Venture, the private equity arm of ICICI Bank invested $26 million for a 10% stake valuing Devyani at $260 million in 2011.  That valuation has close to doubled today in light of business expansion and the lofty value of close rival, $1.3 billion (market cap) Jubilant FoodWorks, which has the franchise for Domino’s Pizza and Dunkin’ Donuts with a network of 550 stores.

Jaipuria typically, is looking for more and is biding his time to list Devyani as well. Abneesh Roy, associate director at Mumbai firm Edelweiss Financial says that with Jubilant trading at 40 times 2014 earnings, fast foods remains a draw for investors: “Consumption is a hot sector. Growth rates will accelerate.”

Jaipuria has been betting on that growth since the outset, say those who’ve dealt with him. “I’ve known Ravi for 22 years, first with PepsiCo and now with Yum. He’s never fallen on a target and is always looking to expand,” says Micky Pant, chief executive, Yum! Restaurants International, who was earlier with PepsiCo India.

Jaipuria has business in his genes, hailing as he does from a marwari trading family with roots in Rajasthan. His father Chunilal Jaipuria and his uncle M. Jaipuria were involved in trading textiles (as distributors for Raymond’s, a popular Indian brand) and banking. His father co-founded the Bank of Rajasthan which he later sold. Chunilal Jaipuria got the bottling franchise for Coca Cola in the 1960s after a chance meeting with a Coke executive in Atlanta. When Coke left the country in the late 1970s, the Jaipurias switched to bottling Thums Up, a local brand.

Meantime, Ravi, the youngest of three brothers, went overseas to study, doing an undergrad in business management in New York. He settled in Montreal with a small venture in textiles and real estate. The death of his wife in a plane crash in 1985–she was going to Delhi to bring back their daughter–made him return home for good where he eventually remarried. (He did, however retain some ties to Canada by maintaining his home and status as a non-resident Indian, though he never gave up his Indian citizenship.)

In 1987, Chunilal divided the business between his three sons. Ravi got one bottling plant in Agra as his share and says he has built his empire up from there. In 1991, when PespiCo entered India, he switched over and has stayed with Pepsi since. (His brothers did likewise.) He admits to being the more ambitious among his siblings. He expanded into fast food by picking up the franchises for KFC and Pizza Hut, which were then with PepsiCo, even though his father, a staunch vegetarian, was against it.

In the past decade as Jaipuria has stepped up his game, RJ Corp has entered new areas.  In 2007, it formed a beer joint venture, Anheuser-Busch InBev India, in which Jaipuria has a 51% stake. Another business is dairy under which he owns Devyani Food Industries which sells Cream bell ice cream in India and Sameer Agriculture & Livestock, a dairy joint venture in Uganda. Jaipuria sees Africa as the next big market after India. “It’s a wide patch and how big you can be depends on how much you can handle. ”