Court’s decision to wind up Indage leaves producers disappointed

The Bombay High Court has ordered India’s oldest wine producer Indage Vinters to wind up. The country’s fledging wine industry calls it a ‘sad’ development, but says that it was bound to happen

On 19th March, India’s oldest wine producer, Indage Vinters, was ordered to shut shop by the Bombay High Court following a winding-up petition filed by its creditors. 

Considering that it was the remarkable guts and perseverance of Shyamrao Chougule, the founder, who brought international quality wine and champagne to India in the 1980s, the nascent wine industry in the country is saddened over this development.

However, given the efforts the company put in to fund its acquisitions in Australia and South Africa, it was a matter of sheer luck whether Mr Chougule’s gamble would pay off or lead to his company’s ruin.

The global financial crisis sealed the fate of the company—the international market did not perform to expectations and its plans to sell exotic Indian wines in overseas markets did not materialise. Domestic demand for international wine also fell far short of the hype created by the industry itself.

“This is a very sad chapter for the Indian wine industry as Indage Vinters were the pioneers in this sector,” said Violet D’souza, director and owner of Indus Wines. She added that the decision was expected as employees and vendors were facing problems with the company. Sula Wines’ vice president, Pradeep Panchpatel, echoed the same views.

This is not the first time the Chogules and Champagne India have been in such trouble. However, this time the situation looks too bad for them to bounce back.

An official from Nasik Valley Grape Promotion Association said that Indage’s travails will impact nearly 50% of the wine industry. Indage had tie-ups with around 15 small wineries like Flamingo, Century and Pratamesh to purchase wine in bulk and the decision of the High Court will probably spell the end of the road for these units, unless they can persuade other wine majors such as Sula, Grover or the UB Group to buy their stock.

But again, the entire industry is already saddled with large quantities of unsold wine from last year.

“Grape framers and other vendors will suffer from the fallout of the Indage collapse,” the official said. As of now, nobody expects Indage to be bought out in a hurry.

A former investor in the company attributed Indage’s downfall to the large gamble that it took in acquiring wineries in Australia and South Africa. “It was a big gamble and they couldn’t handle it. The writing on the wall was clear, they were overleveraged and we didn’t think their plans, which looked perfect on paper, would materialise,” he said. {break}

On the desperation of the group to grow rapidly, the investor said, “It was the race to remain number one. Those days, Vijay Mallya of the UB Group was planning a big presence in the wine industry and Ranjit Chougule—who was in charge of Indage—was worried about losing market leadership. What we did not expect is that it would unravel so fast—in just six months.”

Indage Vinters has said that it will challenge the order. “It is the company's contention that notwithstanding the order passed by the Honourable Court, it is not expedient to wind up the business at this stage and therefore the Board of Directors in its meeting held on 19 March 2010, has decided to challenge the said order by filing an appeal in the competent court,” Indage Vinters said in a statement to the Bombay Stock Exchange.

An email sent to the company remains unanswered, while managing director Ranjit Chogule and Vikrant Chogule refused to respond to messages.

It must be noted that Indage was pursuing a corporate debt restructuring (CDR) package for nearly Rs400 crore. This was led by ICICI Bank while the other lenders were IndusInd Bank, Allahabad Bank, UCO Bank, IDBI Bank and Bank of Rajasthan.

During the hearing on 19th March, Indage said that it had told the High Court that it plans to present a proposal with the support of some secured and unsecured CDR lenders in the next hearing. Indage said it was also ready and willing for a scheme of arrangement under Sections (391) to (394) of the Companies Act, to restructure its outstanding liabilities.

However, there might be some light at the end of the tunnel. On 23rd March, Indage Vintners Ltd has now informed BSE that the High Court has granted a stay of 15 days while considering the petition of winding up filed by the company’s creditors. The company’s statement says: “This is pursuant to the submission by the Company that the plans underway will find an amicable solution to meet with all obligations of the Company.”

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COMMENTS

Jane

7 years ago

I can confirm that Indage UK ltd has went into administration last week after 2 torrid years of cash starvation and poor management. Customers, suppliers and employees have all suffered financially!!!

Anil Agashe

7 years ago

It is a sad end true. The company must be sold immediately through transparent auction. Wine industry is in trouble right now but can be revived. One thing is the pricing. If the pricing is right demand can be revived.

MUKESH KUMAR

7 years ago

SAVE INDAGE FROM COMA!

WHEN ALL KINDS OF COMPANIES IN THE PAST HAVE BEEN GIVEN 'NEW BLOOD' & LEASE OF LIFE, IN A COUNTRY WHICH HAS TONS OF MONEY TO THROW AWAY AT ROGUES, RASCALS & MINIONS WHO DON'T EVEN MATTER, CAN THE GENIUSES IN BUSINESS, GOVT. & WINE INDUSTRY ITSELF NOT COME TO THE RESUCE OF AN INSTITUTIONAL WINE MAKER IN INDIA WHICH, NOT ONLY DARED TO MAKE & PROMOTE INDIAN WINE, BUT MADE IT GLOBALLY ACCEPTABLE & GOT LAURELS TOO FOR INDIAN WINES, IT WOULD BE A DISGUST & A SHAME IT THE COMPANY IS NOT RESCUED!

IT WILL BE A SHAME FOR NOT ONLY INDIAN WINE INDUSTRY, BUT ALSO THE GOVT. & THE PEOPLE OF THIS COUNTRY ITSELF!

CAN VIJAY MALLYA OR OTHER BIGWIGS OF THE INDIAN INDUSTRY NOT TAKE IT OVER AND REVIVE IT JUST LIKE THE TAKEOVER OF AIRLIINES?

AS THE WORSE OPTION, LET SOME FOREIGN WINERY TAKE IT OVER & MAKE AFFORDABLE WINE IN INDIA, WHICH IS A HUGE UNTAPPED MARKET FOR WINES IN THE BREWING!!!

Ian Hude

7 years ago

Indage was/is a pioneer and deserves our admiration. Their assets should be bought over by one of the other majors- probably UB because they have the international presence and savvy to make a success of it.

R Balakrishnan

7 years ago

Old habits die hard. Serial defaulters are given chance by the indulgent system and each time, more money goes down the tube. The beauty of the wonderful system is that the promoter can have wine and the creditors, peanut shells

Ramesh Sopan

7 years ago

Suchitra, your test buds did not smell rat! Recheck how its Australian/south African acquisitions are doing....by the way wine, which has some thing to do with quality. It is the business done with passion; we Indians are at least a generation behind that...we spell quality as quantity!

Is this the second round of the Mumbai property price bubble?

Over eight months, property prices at Powai in central Mumbai have almost doubled

Powai is a tony residential location in central Mumbai. Property prices here are reaching for the stratosphere. Rates have almost doubled over the past eight months. Recently, a two bedroom-hall-kitchen (BHK) of 985 square feet (sq ft) in Lake Homes, a residential complex—developed by Ekta World and Supreme Universal— sold for between Rs 90 lakh-Rs 95 lakh. During the slowdown (around nine months back), an apartment of the same size would have sold for Rs68 lakh. In 2007, when the real-estate segment was at its peak, this apartment would have sold for Rs78 lakh, revealed a source.

Prices have been steadily going up in this apartment complex (Lake Homes). Around a month back, the property was priced between Rs80 lakh-Rs85 lakh; four deals took place at these prices. “Prices have been rising quite rapidly. I have seen four-five deals happening at Rs80 lakh-Rs85 lakh—recently a deal took place between Rs90 lakh–Rs95 lakh,” said a resident of that area, who preferred anonymity.

He also added, “The fourth phase of Lake Homes was launched at Rs5,400 per sq ft in May 2009, because the realty sector was going through a slowdown. But now I feel that the bubble is blowing up.” Currently, a 2 BHK in Lake Homes (of 985 sq ft) is priced at Rs 110,00,000, according to Magicbricks.com. A property agent in Powai said that the current price of a resale property in Lake Homes ranges between Rs11,000-Rs11,500 per sq ft. 

The Nahar Group, which was selling new buildings (of 925-975 sq ft) at its Nahar Amrit Shakti project in Powai at Rs52 lakh-Rs 58 lakh, is now quoting a price of around Rs 90 lakh. The group launched a residential project named Lilium & Lantana during the slowdown (around eight months back) at Rs5,400 per sq ft plus floor rise (a premium of Rs50 per sq ft), but now the price has jumped up to Rs9,000 per sq ft plus the floor rise premium. Hiranandani Gardens, a project by Hiranandani Developers, is retailing at a price ranging between Rs14,000-Rs18,000 per sq ft, said the realty agent. This area had reported sale of a 3 BHK flat (1,350 sq ft, fully furnished) at Rs1.15 crore around nine months back. Now it is difficult to get a 2 BHK flat at this price.

On top of this, buyers are also being forced to cough up 3% extra as service tax if the property is under construction. The Budget proposals on service tax on such properties have still not come into force, but developers are apparently passing on this proposed tax to customers. To add to the woes of prospective buyers, home loan interest rates have also gone up.
 

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COMMENTS

Dolphin

7 years ago

Bullshit

raj

7 years ago

This is the same situation in Western Suburbs in Kandivali & Borivali. New projects are being launched with 3 BHK and 4 BHK only. How can middle class person afford this? Salary has not increased and expenses due to inflation is doubled. Looks like my dream of buying a house will never get fulfilled and i'll stay in rented place only

vivek

7 years ago

how businessman use Black money to avoid tax

buy a flat in 2.5 crore with 100% white
sell it at 2.75 crore out of which 1 crore black.. so in balance sheet show loss of 75Laks
Pay less tax by compensating their operating profit with the above loss

So simple and govt is giving all businessman real estate sector to play with Black money

It will hit our Economy hard and Govt revenue too

RC

7 years ago

Would like to know which is the project shown in this picture.

Ashok mehta

7 years ago

I fully agree that this is bubble as people's inocme have not doubled in the same period.
inspite of so many project how price can rise so fast.
it is all becasue of political corruption. builder has to bribe several goverment department to construct building and he passes all expences to investor

Activist calls for legal action against Vedanta, miners

Biswajit Mohanty, an environmental activist, plans to initiate legal action against Vedanta’s refinery in Orissa on the issue of alleged violations of environmental norms. The activist also plans to take legal action on the long-running ‘mining scam’ in the state

Environmental activist Biswajit Mohanty is planning to initiate legal action against the Anil Agarwal-led Vedanta group for allegedly violating environmental clearances given to its aluminium plant in Orissa. He had also written to the ministry of environment and forests on the issue earlier.

Apart from the Vedanta group, the activist also plans to initiate legal action against illegal mining in two districts in Orissa.

“We will take legal action on the basis that the environmental regulations are being violated and hence the same should be withdrawn, and operations should be suspended,” said Biswajit Mohanty, general secretary, Wildlife Society of Orissa.

Last month, Mr Mohanty had written to Jairam Ramesh, Union minister for environment and forests, alleging that Vedanta was flouting the conditions in its clearance letter by buying bauxite ore elsewhere and then carting it to its refinery on trucks, which is causing air pollution in that area.

PTI news reports have also quoted Mr Ramesh as stating that a ministerial expert committee that had gone into various mining projects in Orissa found violations of various permissions by Vedanta at its Niyamgiri Hills mining site. 

A three-member team of the ministry submitted its report to the government, saying that it had found evidence of violations of green norms at the company’s bauxite project in the Kalahandi district of Orissa. However, Mr Mohanty has not received any direct reply to his letter to the ministry.

“The government should not have allowed the refinery to operate for the past two-and-a-half years. They are causing a huge environmental problem due to the trucks (which are plying), as they are sourcing bauxite from Korba in Chhattisgarh, which is illegal. Around 40,000 trucks ply on this route every year,” Mr Mohanty added.

Alleging that the companies involved in mining are taking out more ore than permitted, Mr Mohanty said that there is a “mining scam” going on in Orissa, which could be bigger than the one in Andhra Pradesh. He said that he is planning to take action against 40 mines in Sundargarh and Keonjhar districts in Orissa.

These mines are mainly iron ore mines and some are of chromate and bauxite. These are mines used by some of the large steel companies and business groups, including a state-run company.

“Every mine is given a cap on the amount of ore that they produce, but the production is much in excess than the one allowed as per the Pollution Act. This has been happening since many years, but the regulatory authority woke up to it only four to five years back. However, action still needs to be taken,” explained Mr Mohanty.

Mr Mohanty claims that many of these mines neither have environmental clearances nor have they have applied for it. “These were mines allotted many years back. If the companies operating these mines wished to exceed the capacity, they should have approached the concerned authority for an increase in the cap,” he added.
 

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COMMENTS

Shadi Katyal

7 years ago

We are full of such bleeding hearts. Does Mr. Mohanty know the meaning of environment or he just wants his people to be without work and thus create more mischief..
India where cows roam and eat garbage and leave dung where flies multiply is environmental safe but when mining dust is not.One cannot make omelet without breaking eggs.
Maybe the company refused to pay him and thus black mailing stats.
what kind of thinking such bleeding hearts leaders have for the nation or people who are employed,
Did we not learn from implosion of Russia or our won Bombay textile and calcutta Jute industry that too much unionization and outer interference is not good .
Indfia need control of such trouble maker and some discipline and learn ethics of work.

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