United Spirits to buy out Greater Than gin maker Nao Spirits in a ₹110 cr deal

United Spirits Ltd (USL), the Indian arm of global liquor major Diageo Plc, is acquiring homegrown craft spirits maker Nao Spirits & Beverages Pvt. Ltd in a deal valued at about ₹110 crore, it said in a stock exchange filing late Thursday evening.

The USL board approved the acquisition of an additional stake in Nao Spirits, which owns gin brands like Greater Than and Hapusa, on Wednesday. 

The company, which already holds 30% in the business, will buy 37,683 equity shares from existing shareholders in two tranches for around ₹53.8 crore.

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It will simultaneously invest approximately ₹56 crore via a fresh subscription of 31,820 equity shares and 27,577 compulsorily convertible preference shares (CCPS), it said in the filing.

Following the completion of the first tranche and the new issuance, USL will own around 97.07% of Nao Spirits’ paid-up capital on a fully diluted basis. 

The second tranche of the share purchase, to be completed later, will raise its ownership to 100%, making the craft spirits maker a wholly owned subsidiary of the Diageo arm.

The USL board has also authorized a further investment of up to ₹20 crore in the alco-bev startup through equity or CCPS to support its working capital and business requirements.

USL first acquired a stake in the company in March 2022 and has since completed a gradual buyout. Nao Spirits entered the premium gin market in 2016. 

“Ventures, our investment arm, is dedicated to strengthening our portfolio by investing in disruptive alco-bev startups. The acquisition represents a pivotal step in exploring future growth opportunities in Indian craft spirits…,” said Praveen Someshwar, managing director and chief executive, Diageo India (USL).

India in focus

In September 2024, Mint reported that Diageo, the world’s largest spirits company, planned to pour $100 million ( ₹840 crore then) into the country over the next three years to grow its premium portfolio and develop new products tailored to local tastes.

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Its chief executive Debra Crew, speaking to Mint, said India was now emerging as a key innovation hub for the company, where products like the homegrown single malt Godawan are first tested and refined before being launched in global markets.

Crew added that Diageo was also open to investing in Indian craft spirit brands, citing the country’s growing pool of young, affluent consumers. In addition to its investment in Nao Spirits, Diageo has set up a ₹45 crore innovation centre in Goa to support research and development of premium beverages.

Data from international drinks consultancy IWSR showed that gin had a rapid ascent in the country before levelling off in 2024. The category grew a modest 1% in volume, signalling that the enthusiasm around homegrown craft gins may be cooling.

According to industry estimates, at its peak two years ago, the craft gin segment sold roughly 350,000 cases annually. Insiders told Mint that those numbers have now plateaued, an indication that consumer interest may be shifting toward other white spirits.

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For the year ending 31 March 2025, Diageo India posted gross revenues of ₹26,780 crore, marking a 5.4% year-on-year increase. In the March quarter alone, net sales rose 10.5% to ₹2,946 crore, driven by a strong portfolio performance and the reopening of trade in Andhra Pradesh. 

Quarterly profit after tax stood at ₹451 crore, up 17.4%, while gross profit climbed 13.4%, pushing the gross margin to 44.5%.