Mint Explainer: Inside the lucrative world of soft-drink bottling manufacturers

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Subscribe to enjoy similar stories. When the late George Fernandes, the industries minister in the short-lived Janata Party government of 1977, issued a diktat to multinational corporations Coca-Cola, IBM and AstraZeneca to dilute their stake in their wholly owned subsidiaries to 40% in favour of Indian shareholders, Coca-Cola and IBM chose to exit India. Later, during P V Narasimha Rao's pro-liberalisation government in 1993, Coca-Cola returned.

It bought out Ramesh Chauhan's Delhi Bottling Company and Coolaid, the bottling companies of five carbonated drinks, in 1998. With Coca-Cola India now said to be evaluating options to list its wholly owned bottling subsidiary - Hindustan Coca-Cola Beverages (HCCB), Mint explains the rationale behind companies considering such moves. Experts said there is a trend of consumer giants spinning off their units to optimise their balance sheets, go asset-light and focus on their core brands and business models.

Coca-Cola India’s ambitions to list HCCB come almost a decade after rival PepsiCo's bottler, Varun Beverages, listed on the local stock exchanges, yielding significant value for the Jaipuria family. Unlike PepsiCo, Coca-Cola owns its bottling franchise, just as other MNCs including consumer goods major Whirlpool, ball-bearing specialist Timken, and tobacco giant BAT, who are keen to take advantage of the valuations that Indian investors give to well-run MNCs. Varun Beverages commands a market valuation of ₹2.09 trillion.